Sony video games have security devices in their game cartridges and proprietary hardware that allow only games made by the company or its licensees to be used with each system. Sony is using which of the following barriers to entry to make it difficult for competitors to convert its existing customers.
A) Switching costs
B) Capital requirements
C) Distribution costs
D) Product standardization
E) Economies of scale

Question

Quizplus · Accepted Answer

Sony's use of security devices in their game cartridges and proprietary hardware that create a situation where only their games or those of their licensees can be used with their systems effectively increases the cost or difficulty for customers to switch to a competitor's product, thus representing switching costs as a barrier to entry.

Sony Video Games Have Security Devices in Their Game Cartridges