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GTI Global Network > Current Issue > The Editor
The Editor
Taiwan Sees Claw Machine Fever and the Arrival of a Low-end Economy!

Claw machines are very popular throughout Taiwan and can be seen at almost every street corner.  "The claw is very close to the hole now!” “Ah no, it dropped again……!”  On weekends in Ximending District of Taipei City young couples, parents and children gather in front of claw machines.  Sometimes they are very excited with their eyes wide open, and sometimes they pucker their mouths and let out a sigh of disappointment.  New claw machine stores have been opening one after another on the streets of Ximending, in strong contrast to those empty storefronts for rent.
 

Now let’s move to the east of Taipei City.  In the past two months, a storefront at the corner of the intersection of Dunhua South Road and Chung Hsiao East Road, which used to be an Apple store has been remodeled into a claw machine store.  Even just a 5 minute drive away, the ATT 4 Fun department store in the most cosmopolitan commercial area of Taipei, the Xinyi District, has turned an eye-catching space next to its 4th floor escalator into a claw machine area in April.  The site operates more than 20 claw machines.  Having existed in Taiwan for more than 3 decades, claw machines--this ancient species of amusement machine--have stirred up a new fever over the past two years.
 

During an interview with “Business Weekly”, Vice Chairman Ji Fu-teng of the Gift Claim Vender Associations of Taiwan said, "Claw machines belong to the bottom-end economy".  The so-called "low-end economy" means the economic activities thriving among the lower and middle classes in the M-shaped society of Taiwan where real wages have fallen back to the levels of 17 years ago.  It is a business tendency marked by “low cost, low spending”.
 

What kind of new Taiwanese style of playing has empowered claw machines this ancient invention to make such an astonishing comeback?  Firstly, even if players cannot grab anything, they can still obtain merchandise as long as they insert a certain amount of coins.  Secondly, claw machine specialty stores are low-cost unmanned shops and are capable of providing relatively inexpensive products.  The online buy-back system, which originated from operators buying back hot products from players, can also make the industry more dynamic.  If skilled players can quickly sell grabbed products online and earn a spread, they would have a greater incentive to play again.
 

According to the Association’s estimates, there are more than 10,000 claw machine stores across Taiwan.  The total number of people employed related to this industry including store owners, individual claw machine operators and people from the claw machine supply chain amount to at least 100,000.  Based on a conservative estimate, the claw machine industry’s annual production value in the past two years has reached NT$100 billion.
 

This street game fever is a result of people seeking relief from low cost entertainment solutions because of wage stagnation and the increasing pressure of life.  However, if such rapidly spreading claw machine specialty stores could not find a reasonable business model and transform into a new influential channel, what would soon follow might be a new wave of fast bubble bursting in the form of store closures.  This issue should be treated with caution.

 

 
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