Supply Chain Coordination with Contracts for Online Game Industry

Abstract

So far the supply chain contracts designed by the scholars have made good result in coordinating supply chain of traditional and tangible products, but they may not make sense for digital products such as online games. This paper deals with the coordination issue of the whole channel for online game products. Firstly, the supply chain members and their operation processes of the online game industry are analyzed, and then a new supply chain contract model following the idea of revenue sharing model for online game products is given. Finally a concrete example is provided to show that current contract model in online game industry cannot achieve coordination and the profit in whole supply chain cannot be optimized, but by using the new model, the coordination of the whole supply chain can be achieved and the outcome of the whole supply chain is Pareto optimal.