Redemption games are typically arcade games of skill that reward the player proportionally to their score in the game. The reward most often comes in the form of tickets[disambiguation needed], with more tickets being awarded for higher scores. These tickets can then be redeemed (hence the name) at a central location for prizes. The most inexpensive prizes (candy, small plastic or rubber toys) may only require a small number of tickets to acquire, while the most expensive ones (skateboards, low end electronics) may require several thousand. In general, the amount of money spent to win enough tickets for a given prize will exceed the value of the prize itself. Some redemption games, particularly electronic ones such as Flamin' Finger involve elements of chance, which can be set by the operator.
A variation on the ticket-based redemption game is the merchandiser, which directly displays and dispenses merchandise, rather than dispensing tickets which are then redeemed for prizes.
Redemption games can be seen as the modern successor to carnival games, as the same general principles apply.
As revenue from traditional arcade games started to decline in the latter half of the 1990s due to competition from home game consoles and the Internet, arcade operators began to rely on the income from redemption and merchandiser games to remain profitable. These games were often much less expensive to purchase, and had a better return on investment than video games. The revenue of video games would diminish as the titles were released to the home market. Redemption games did not have that problem. Redemption and merchandiser games could generate good revenue for many years, compared to months for most video games. Redemption games have allowed many arcades to remain profitable in an ever changing entertainment market.
A Japanese form of redemption game is pachinko, which features small metal balls which are both used in play and used for redemption, instead of tickets. Pachinko is primarily or entirely a game of chance.
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