Capsule Toys (or Toy Capsules) are mini gashapon figurines Ryo Hazuki can collect. The toys are characters or items from Sega games such as Virtua Fighter, Sonic the Fighters, Hang On, or NiGHTS into Dreams. In Yokosuka they cost ¥100 and in Hong Kong they cost $5.
Capsule Toys are first seen at Yokosuka right in front of the Abe Store. The two machines are from the Virtua Fighter and Sonic The Fighters games. Also if Ryo goes inside the Abe Store and purchases chocolate, caramel, or potato chips he can enter a raffle and could win rare capsule toys such as a Gold or Silver Dural from Virtua Fighter, but the chances of winning are low. Ryo can also find capsule toys in front of You Arcade the two machines are Excite Sega World (featuring various Sega characters such as The Bonanza Brothers and NiGHTS) and Virtua Figher Kids machines. If Ryo goes to the Tomato Convenience Store in Dobuita and win fourth prize he can get rare capsule toys, the choices are Super Sonic, Metal Sonic, a Hot Dog Truck, or a Gold Binsbein. And when Ryo goes to the harbor there are harbor, Excite Sega World, and vehicle machines and also the Tomato Convenience Store prizes at the harbor are different than the prizes from Dobuita. Ryo can also earn Forklift toys when he enters the Forklift race and depending on what place he came in the race, he earns a different Capsule Toy. For example if he wins 1st prize he will win A forklift with the #1 on the side. And with the Shenmue Passport disc Ryo can trade prizes from the slot house such as Cherry or Mini Jukebox for rare capsule toys of animals.
The same capsule toys machines from Yokosuka are still in Hong Kong but there are new toy sets including Virtua Fighter 2, Virtual On, and Sega-AM2. There is a new Virtua Fighter Kids toy which is "Kids Dural C". There also is a new option to get money by selling capsule toys at pawnshops. Ryo can also get advice about Capsule Toys from a man named Zhou Gong Jue who is obsessed with collecting the capsule toys. If Ryo receives a winning can, instead of getting a free chance at the raffle, he gets a random capsule toy in the can.