Chip Damage

Chip Damage is a term referring to the very small, or "chipped", damage a fighter receives when blocking a Special Attack, usually a projectile. Blocking special attacks will usually stop a combo attempt, but the blocker will receive chip damage for doing so. Most characters lacking a projectile tend to take chip damage quite often, as they need to block the projectile or jump over it (which is easily predicted).

Video
Below shows Gouken parrying Ultra Combos, and receives chip damage.

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