Machines are often programmed to make winning nearly impossible
Arcade stores are often open 24 hours and don’t require workers
Low entry requirements have drawn rookies into the arcade business
Claw machine stores have recently begun to dominate the streets in Taiwan, drawing passers-by in to try their luck. By spending a measly ten dollars, customers at a claw machine store get the chance to win prizes worth ten times the cost. However, it’s actually bait to ensnare those who don’t know when to give up.
Watch out – it’s a trap!
Unlike the usual retail shops in which owners are in charge of everything, claw machine store owners act the role of a landlord whose responsibility is to offer space and machines; managers, people renting each machine, are the ones who fill in the prizes and do basic maintenance.
While these arcade machines seem like a profitable challenge, customers often find themselves draining their pockets in exchange for numerous failures. In fact, the machines are often programmed and adjusted by the managers to make winning nearly impossible, luring customers into a trap.
An unbeatable game would dissuade customers from returning, therefore, these games aim for addiction.
These arcade machines were once seen as gambling and setting up the machines was actually illegal. To avoid being charged by police authorities, owners came up with the idea of a “fair trade”. If customers insert what managers consider an “equal” amount of money in the machines, they are guaranteed to win a prize.
Profit in a sick economy
Moreover, these arcade stores are often open 24 hours and don’t require workers; store owners can easily earn back the costs by collecting monthly rentals. With the low rent and a nearly unbeatable system, managers’ monthly profits could reach up to NT$3000 per machine.
The rise of the arcade business indicates Taiwan’s poor economy; low incomes force people to cut down expenses, which discourage consumers from making high cost purchases. Therefore, businesses like claw machines, which cost customers just a few dollars, began to sprout up.
Customers hope to earn a huge profit by spending a little amount of money, (which sounds a lot like gambling) therefore gaining a sense of achievement in their success. As for owners, the low entry requirements drew rookies into the arcade business, seeing it as an opportunity to earn experience and quick money for future usage.
Claw machines, egg tarts, and boom and bust fever
Phenomenons of skyrocketing growth in a business are commonly seen in Taiwan. New products are introduced through social networks, forming a trend among consumers, drawing huge crowds. The sudden increase in demand also draws more investors into the business. Economists refer to the phenomenon as the “Egg Tart Effect”; merchants will eventually face the fate of shutting down their businesses as the craze dies down.
Taiwan’s economy is growing at a steady pace, due to low private consumption and external sector. The constant rises and falls from things like egg tarts and claw machines create an illusion of a booming economy. Unfortunately, they are actually indications of an unhealthy economy.