Questions about UFOs

Every summoned UFO has two meters. I'm sure you've already noticed the horizontal red bar, which is the health meter that decreases as you damage it. What you may not have noticed is the circular meter around the UFO, which fills up as it eats items. Note that all items will be sucked by a UFO if one is present. Once the circular meter is full, it will drop a saturation reward. Destroying the UFO will yield a destruction reward, release a rainbow-colored UFO token, and grant you all of the items that the UFO sucked up at the maximum value (as if you were above the PoC) which is furthered increased by a multiplier that depends on the UFO color and on how much of the meter is filled up. Items that are sucked up may also be altered by the UFO, again depending on the color.

For specifics on each color, I listed them below. If you're playing for survival, only the first two lines (Saturation and Destruction rewards) are important. The rest are only for scoring purposes.

Red
Saturation Reward: Life Piece
Destruction Reward: Life Piece + Rainbow UFO token
Maximum Multiplier: 1x (if you're not at full power) or 2x (if you're at full power)
Other Effects: Converts power items into point items

Green
Saturation Reward: Complete Bomb
Destruction Reward: Bomb Piece + Rainbow UFO token
Maximum Multiplier: 2x
Other Effects: None

Blue
Saturation Reward: Nothing!
Destruction Reward: Rainbow UFO token
Maximum Multiplier: 8x
Other Effects: None

Rainbow
Saturation Reward: Rainbow UFO token
Destruction Reward: Rainbow UFO token
Maximum Multiplier: 4x
Other Effects: Changes power items into point items, and point items into power items

Regardless of what color UFO you summon, you should ideally try to saturate it first (kill enemies so that the UFO eats enough items) before destroying the UFO. This will yield both the saturation and the destruction reward. Note, however, that the UFO will leave if it stays on for too long, so if you fear that you can't saturate AND destroy, it's better to focus on just destroying it for the area clearance and the destruction reward (unless you're confident you can saturate a green UFO, since complete bomb > bomb piece)

If you want to rack up a lot of lives, try to summon a lot of red UFOs. If you want to rack up a lot of bombs, try to summon a lot of green UFOs. If you tend to die a lot without spending all your bombs, it is recommended that you go for red UFOs. Otherwise, if you're confident you can manage your bombs well, it is recommended that you go for green UFOs (you get more bombs overall, and not dying much means you don't have to deal with the cruel -1 Power penalty very often).

If you accidentally screw up your chain e.g. you collect a token of a different color than what you wanted, it's more efficient to summon a rainbow UFO, since it drops two rainbow tokens if you saturate -> destroy, rather than restart your chain from scratch.

If you don't care about score, don't summon blue UFOs. They have no survival benefit besides the area clearance.

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To answer your questions, although grazing is relevant to score, it's not the most important component. Blue UFOs are vital for scoring because of their 8x multipliers. Rainbow UFOs are very nice for power-item-heavy moments since they turn power items into point items. Rainbow UFOs are further useful for producing more UFO tokens, which is good for scoring because collecting a token while a UFO is active will increase your PIV by 1000 (equivalent to grazing 1000 bullets!)

What caused the red UFO to spout a life piece was that it was able to suck up a sufficient amount of items to be fulfilled. To force this to happen, simply focus on killing enemies after you summon a UFO and don't destroy the UFO (damaging it is fine) until it collects enough to release the life piece (or whatever the saturation reward for the color is).

SanaeB is awesome, one of the best shot types in Touhou history (not just UFO!). SanaeA is okay, but she can't really compete with ReimuA/MarisaA/SanaeB. Just play with whichever shot types you're comfortable with. As long as you don't pick MarisaB, you should be fine~