Claw machine stores are gaining popularity across the nation, with many saying that it is an easy way to earn extra money on the side.
According to a man identified only as Stanley, the business model is simple, and claw machine store owners can break even within a year, after which they can start making revenue of up to NT$150,000 (US$5,112) a month.
The store owner is responsible for setting up the infrastructure — finding a space, buying 26 to 30 claw machines and installing security cameras — which usually costs under NT$1 million, he said.
The owner then rents out each machine at about NT$5,000 a month to those interested in managing one as a source of additional income, said Stanley, who is himself a manager.
With all 30 machines rented out, the arcade owner can make NT$150,000 a month.
The prospect has drawn many into the business as store owners or managers, one owner said, adding that owners have to understand what makes players want to return to an arcade — namely the possibility of winning a prize.
Claw machine manager Chang Hsiao-yi (張小翼) said the most important thing for managers is to give players a realistic chance of winning.
If the machine is set to an unbeatable level, then it will dissuade players from coming back, which in turn will cut revenue, Chang said.
While it might be difficult to predict the demand for playing claw machines, the managers’ monthly earnings paint a clearer picture.
Stanley, who manages eight machines, said that on average, he makes a monthly profit of NT$3,000 to NT$5,000 from each machine.
The game is addictive and people who play regularly have been known to spend NT$4,000 to NT$5,000 per month on claw machines, an issue that has raised concern among lawmakers.
It should be investigated whether the machines contain prizes prohibited for children, and if so, the stores should be a certain distance from schools, Chinese Nationalist Party (KMT) Legislator Apollo Chen (陳學聖) said.
As the stores can turn into hangouts for adults to drink alcohol, they should not be near schools or be readily accessible to children, Democratic Progressive Party Legislator Chang Hung-lu (張宏陸) said.
Lawmakers have suggested that the claw machine arcades follow the regulations for video game arcades, which stipulate that they must be at least 50m from junior-high or elementary schools, high schools, vocational schools or hospitals.
Realtors also weighed in on the matter, saying that the “arcade claw machine bubble” will burst within six months.
Chang Hsing-ming (張欣民), general manager of a real-estate firm and a real-estate investment consultant, said it is extremely doubtful that claw machine store owners will be able to continue to afford paying rent.
Once the trend fades, store owners would have a difficult time making enough money to pay NT$50,000 to NT$70,000 per month for the space rental and would be forced to close, he said.
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