Tokens and Tickets: A Critical Analysis

TOKENS AND TICKETS: A CRITICAL ANALYSIS OF THE ECONOMICS OF THE ARCADE
An Essay by Chris “kidko” Sz.

The local arcade is often a gathering place for even the poorest receiver of an allowance. But is it economically feasible to go there again and again, or even at all?

The first thing one must consider is the token. The tokens can be purchased for 25¢ each (in 4-, 20-, or 40-token sets for $1, $5, or $10 respectively) or in bulk, at 100 tokens for $20. The avverage price of a token is thus actually 15¢, after averaging those two prices (5¢ for bulk, 25¢ each). Machines require 1 to 3 tokens to operate, and return 0 to 300 tickets (able to be traded for prizes). On average, however, 1 token will return about 3 tickets, give or take.

One can reasonably expect to receive a larger amount by playing certain games over others (Storm Breaker, average return of 7 tickets, over Daytona 500, returning 0), and thus a corrected average of 7 tickets to a token is more plausable. The study, speding $40 and playing 200 tokens, received a similar number, 7.4 tickets per token.

The actual price of a ticket can be easily found by dividing the cost of a token by the average amount of tickets gained off one one. This comes out to 3.3¢ invested in each ticket, on average. I say on average because that’s true; dividing your money spent by the number of tickets you have will also give you an amount, but it will be skewed, slightly. For example, the study ended up with an average of 2.7¢ per ticket, due to the number of tickets: more than 1800.

A bag of Tootsie Rolls contains at least 150 of them, and runs for about $1.99 from Target, Wal-Mart, CVS, etc. This is a cost of about 1.3¢ per Tootsie Roll. At the arcade, each requires 3 tickets, or 10¢ (rounded up from 9.9¢). For every Tootsie Roll that you exchange for, you lose 8.7¢, for which you could have bought 6 Tootsie Rolls from 7-11 (let’s set aside the fact that they’re not sold individually at such locations).

Another example: Laffy Taffies (the large, 6″ ones). They retail for about 25¢ each (again, not sold individually). Arcade price is 40 tickets, or $1.32. The player is losing around $1.07 on each one he trades for. To get an even 200 ticket’s worth, 5 of them, you lose $5.35 in tickets. This amount could have purchased up to 21 of the at any other location, not counting the money spent on the tokens themselves (6 of them, $1.50 for you, or worth 90¢ once exchanged).

But it begs the question: what does all of this mean? Give the case of the Laffy Taffies, it means that one had to spend $1.50 to get 90¢ worth of tokens, to get the $1.32 worth of tickets. That means that 18¢ of the token and ticket pricec has gone straight to the establishment during coin-token-ticket exchange, discounting the fact that the candy itself costst about 25¢. At the end of the day, $1.25 of the $1.50 in tokens has gone directly to the arcade, with only a quarter actually going to pay for the quarter. This means that 83% of the tickets spent on Laffy Taffies could remain your own, should you decided to spend 25¢ (17%) elsewhere.

Were you looking to break even, ticket-wise, it would be tricky. Math dictates that it would take 13 tickets to a token to make you break even, and 14 to start “beating” the arcade (as one would talk about beating the house at Las Vegas). This is double the average amount, and in most cases, can’t be done easily. Most games, in fact, will not return more than 10 tickets or so without winning a “jackpot” or similar prize. The odds of this sort of thing are infintesimally small, and thus so are those of you breaking even while playing.

To wrap up: Tokens, which cost 25¢, lose 40% of their value in transaction, with each token only being worth 15¢. Tickets, which is the only thing tokens can be exchanged for, are only worth 3.3¢, 13.2% of the original value. This translates to the fact that 86.8% of every quarter spent on tokens goes to the arcade in the end, regardless of use. And, of course, there is the money wasted by purchasing/trading using tickets instead of cash at a store.

* All games, token prices, prizes, etc. taken from a Swings N Things.

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Also posted on Google Docs at: http://docs.google.com/Doc?id=dw8g8sh_22gh6jfzdr