A pneumatic prize dispensing system for an arcade game. The game includes a pneumatically-controlled method of suspending and controlling the movement encapsulated prizes within a vertically-oriented transparent tube by means of differential air pressure. A player controls the vertical position of the prize by means of a pneumatic control valve. The object of the game is to control the position of the prize capsule to match a target position zone presented to the contestant via a set of visual cues for a predetermined period of time. The game dispenses the encapsulated prize or alternatively, prize tokens, if the game-winning criteria are achieved.