I love that coloured floor background of the arcade, really great aesthetics! The concept of an evil claw machine is very interesting, especially with the claws themselves being part of his body. My initial thought was a mechanical machine that's just sort of possessed, but it ended up being a sort of green alien blob. I have to say that's probably the only part of this I didn't like, was just the monster design down below where it's like a tube connected to the machine sort of thing. Also when we see it, I was really hoping there would be some kind of faceoff with it down below, or chasing through the arcade, or getting crushed by the machine or something forming its own crater on top of him. Maybe he just explodes into stuffed animals.
But that's just my personal opinion, this is a really cute movie and I'm sure it's not meant to be too spooky since its for kids, all in all I love it and it'll probably last a long time.