How to Beat Claw Machines: I Turned It Into a Profitable Side Hustle

This as-told-to essay is based on a conversation with Mike Nay, a claw machine expert and plush reseller. It has been edited for length and clarity.

What started as a pandemic hobby — messing around with a couple of claw machines I bought online — turned into a side hustle that’s earned me over $40,000 in sales, so far.

I source exclusive plush toys from arcade claw machines and resell them online through platforms like Mercari, eBay, and Poshmark.

I sell between three and five plush dolls per day, averaging $20 per sale. However, I’ve sold more exclusive, collectible plushies for as much as $200.

How I got started, and where the money is

Mike Nay bought his first claw machine during the pandemic.

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When I first got into claw machines, I wasn’t thinking about revenue. I just wanted a fun distraction during lockdown.

I bought my first claw machine from Alibaba for around $800, filled it with plush toys I won at arcades, and started learning all the tricks.

People assume claw machines are all rigged or based on chance, but there’s real strategy involved. I study the geometry of the plush, where it’s positioned, the weight distribution, and the claw type. Each machine has different settings — operators can control the claw’s grip strength and how often it actually pays out.

Different claw machines have different settings, making some easier to beat than others.

Wong Yu Liang/Getty Images

Once lockdown restrictions lifted, I was back in the arcade, winning dozens of plushies that were taking up a lot of my shelf space. That’s around the time I realized there was a lot of good resale value for these toys.

At first, I listed a few on Mercari, which sold within hours. Once I noticed consistent demand, especially for Japan-exclusive plushies, I started to ramp up my sales.

I’ve sold over 3,000 plush toys. Most costs me between $3 and $7 to win at arcades in chains like Round1 and Dave & Buster’s. If I sell that item for $15 to $25, the ROI is significant, especially when I can win several in a single session.

My average arcade session costs between $150 and $200

Mike Nay playing for a Hello Kitty plush toy at a claw machine in a Round1 arcade.

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I usually walk into an arcade with $150 to $200 in arcade credits and come out with two large laundry bags full of toys. If the machines are paying out well, that haul can net me between $300 and $500 in resale value.

On great days, I’ll invest $400 to $500 in credits and earn between $1,000 and $1,500 in sales.

I’ve trained myself to identify machines that are likely to pay out quickly. That way, I don’t waste money on poor setups or high-difficulty wins.

I don’t typically pursue machines with a one-in-30 win ratio. I target the ones where I can usually scoop a prize in under five tries.

I run market research like any online seller

Before I head to the arcade, I check sold listings on eBay and Mercari to see what’s trending. I follow other plush resellers online and stay active in Reddit communities where fans post about new arcade drops.

Some plushies — like Round1 exclusives or limited-edition anime collabs — are highly collectible. I also closely track plush with cultural relevance, like any anime that has a new popular movie coming out. When I see those in machines, I’ll spend more aggressively to grab them, because I know they’ll move fast online.

I treat my inventory like a retail business

Mike Nay’s “ar-cave.”

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At home, I have a dedicated room, which I call the ar-cave (short for arcade-cave), where I have about 500 plushies that I’ve sorted in plastic bags by category: Pokémon, anime, holiday, video game, Squishmallows, etc.

I also donate excess inventory to charities, especially around the holidays. If I win 10 plush in one session and can only sell six, I’ll donate the rest. I’ve donated over 1,000 toys. It’s good for the community and helps manage space.

My long-term goal is to open a claw machine arcade

The business has grown beyond what I expected. Between selling plush, running a TikTok channel called “ArcadeFriends,” and getting recognized at arcades, this is now a meaningful part of my life and income.

Eventually, I want to open my own arcade and stock it with curated plushies I know people love. I’ll also set the machines so people can actually win.

Until then, I’ll keep running my plush side hustle, one claw at a time.

Do you have a story to share about profitable side hustles? Contact the editor at [email protected].

This story was adapted from Mike Nay’s interview for Business Insider’s series, “Big Business.” Learn more about Nay and others’ toy businesses in the video below:

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