Tournament poker differs from traditional cash, or ring, games in several ways. Most significantly, players win money based on their finishing position in the tournament, and not on the value of the chips they have won.
The winner of the tournament will have collected all the chips in play and will win the biggest prize. But all of the highest finishers - typically about 10 per cent of the entrants - will win some return on their investment. The higher you finish, the more money you win. The very top places earn payouts many times the buy-in. These are the dizzying sums you often see written on huge bank cheques being handed to a major tournament winner.
But tournaments of all sizes share the same principle: they provide a potentially huge upside for a relatively small and fixed investment. In a "freezeout" tournament, you know how much it will cost to enter and cannot lose any more. If you lose all of your chips, you are out of the game.
Tournaments can often follow the exact same format regardless of buy-in. You can join a $1 buy-in tournament and receive the same amount of chips, and play the same structure, as players in a $1,000 buy-in tournament. The prizes will obviously be significantly higher in the $1,000 tournament, but they will be distributed according to the same schedule.
There is always one particularly unlucky player in a tournament: the player who is eliminated immediately before the prize-winning positions. This player is said to be "on the bubble", because his or her elimination metaphorically bursts the "bubble" around the money.
Tournaments also guarantee that there will be clear winners and losers, rather than the potentially endless nature of cash games. This ensures there will be bragging rights to be enjoyed over friends.
For many reasons, tournaments are deservedly a very popular way for beginners to enjoy playing poker.