Dig­ging a claw into Ar­cade gam­ing and mak­ing it high-tech again

China Daily (Hong Kong) - - BUSINESS - By CHAI HUA in Shen­zhen grace@chi­nadai­lyhk.com

A new high-tech so­lu­tion has turned an old style Ar­cade toy claw ma­chine into a trendy in­vest­ment op­por­tu­nity.

By sim­ply us­ing their smart­phones to scan a QR code on the win­dows of these gam­ing ter­mi­nals, cus­tomers can pay to play through WeChat or Ali­pay.

In a flash, the days of in­sert­ing coins have been con­signed to his­tory.

The sec­tor is so hot that Leyaoyao In­for­ma­tion Tech­nol­ogy Ltd Co, which makes mo­bile pay­ment de­vices for claw ma­chines in Shen­zhen, has re­ceived three rounds of fund­ing, to­tal­ing about 60 mil­lion yuan ($8.87 mil­lion).

“We sold about 80,000 QR code de­vices for toy claw ma­chines in more than 300 cities by May,” the com­pany told Sohu.com, one of China’s big­gest me­dia on­line out­lets. “Monthly pay­ments from these ma­chines to­taled 80 mil­lion yuan.”

Leyaoyao also makes money by sell­ing ad­ver­tis­ing on its WeChat ac­count, which users are guided to be­fore pay­ing to play on claw ma­chines.

These are Ar­cade games where you try to pick up gifts, such as cud­dly toys and key rings, by mov­ing a me­chan­i­cal claw.

Be­fore QR cod­ing, you could only find them in Ar­cades as you had to em­ploy staff to empty the coins from the ma­chines. But now they are sprout­ing up in shop­ping malls, movie the­aters and even metro sta­tions be­cause you need a min­i­mal num­ber of staff to ser­vice them.

“All of our com­pany’s 4,000 ma­chines have been equipped with mo­bile pay­ment de­vices,” said Li Rong­wang, op­er­a­tions and tech­nol­ogy di­rec­tor at Guangzhou Star Nigel Trade Co Ltd.

He also pointed out that new tech­nol­ogy has solved the prob­lem of “fake coins” for one of the largest man­u­fac­tur­ers and op­er­a­tors of doll claw ma­chines in China.

“The price of one fake coin is about 0.35 yuan to 0.5 yuan, but the value of our coin is 1 yuan.”

By switch­ing over to QR cod­ing, the com­pany’s prof­its have in­creased by be­tween 2 per­cent to 3 per­cent. “Over­all, the sig­nif­i­cance of the up­grade is about man­age­ment,” he said.

Al­lPayCloud Tech­nol­ogy Co Ltd, a startup which is also based in Guangzhou, has also trans­formed the toy claw ma­chine sec­tor af­ter rolling out its Saas (Soft­ware as a Ser­vice) plat­form.

This is a long-dis­tance and real-time man­age­ment sys­tem, which in­cor­po­rates venue place­ments, ma­chines and staff. It pro­cesses about 20,000 pay­ments ev­ery day, while daily transactions ex­ceed 1 mil­lion yuan.

“Our sys­tem can re­port mal­func­tions in ma­chines and an­a­lyze big data col­lected to op­ti­mize the mar­ket­ing plan,” said Zhou Ji­axin, chief ex­ec­u­tive of­fi­cer of Al­lPayCloud.

Li Yong ji, di­rec­tor of the cre­ative cul­tural gifts ma­chines’ branch at the China As­so­ci­a­tion of Amuse­ment Parks and At­trac­tions, con­firmed there are about 1.5 mil­lion toy claw ma­chines in the coun­try with 150,000 units added each year.

“At least 10 per­cent of that to­tal now have mo­bile pay­ment sys­tems,” he said.

The As­so­ci­a­tion is plan­ning to fur­ther up­grade the toy ma­chine in­dus­try by la­bel­ing gifts with price tag bar­codes. “In fu­ture, cus­tomers will fi­nally get the toy if they spend enough money,” Li said. “If they spend the same amount that the toy is worth, they get free goes un­til they win it.”

More im­por­tantly, Li stressed that reg­u­la­tions might have to change, such as tax is­sues and stan­dard­ized prac­tices, to help the sec­tor de­velop.

JI HAIXIN / FOR CHINA DAILY

A shop­per pays her bill by scan­ning a QR code at Bin­goBox in Shang­hai.

DENG YINMING / FOR CHINA DAILY

Peo­ple play on a toy claw ma­chine in Taiyuan, Shanxi prov­ince.

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