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Fast-forward to modern times, just two days ago I was offered money to play an arcade game with someone and I still refused and tried to get him to abstain as well, pledging we could go back to the house and play anything we wanted, either same screen or via LAN.
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The only way the arcade is going to survive is with innovative games that can't be played at home due to special peripherals. Examples include DDR and other rhythm games (unless you've spent a crazy amount of money, you can't duplicate the arcade experience); games like After Burner Climax, with the moving, vibrating chair; and House of the Dead 3 and 4, with shotguns and uzis. Unfortunately, these types of games are expensive to own, which means that only the larger arcades, like Dave and Busters, or boardwalk arcades at beaches, can afford them.
I have fond memories of time spent in arcades as a kid, mostly because I didn't get to go that often. The closest arcade was 30 miles away, in the nearest enclosed shopping mall (in Hickory, NC). I'd tag along with my mom once a month or so and would be allowed to play as a reward for putting up with the hours spent in the fabric store. I don't remember exactly what I used to play, but I know Donkey Kong was a favorite. The local Food Lion grocery store had a Galaga cabinet, and I'd beg for quarters every time.
Sadly, most arcades I've known over the years have closed. The one in Hickory moved several times within the mall before finally closing sometime after I left college. My first job was at a Shoe Show in the University Mall in Chapel Hill, NC, and there was an arcade a few stores down. I used to waste time on slow nights in that arcade, playing House of the Dead, until it closed a few months before I quit. There was a small arcade in the UNC student union, also with House of the Dead and a bowling alley, but they remodeled the union right after I graduated, and when I went back this year, the arcade was gone, and the bowling lanes had been covered over for ping pong tables.
There aren't too many arcades in Baltimore, as most of them have closed during the time I've lived here. There's a small one on the east side of the city in mall with a laser tag place, the aforementioned Dave and Busters, and the bowling alley across from my apartment has a few crappy games.
If I want classic games, the closest arcade I know of is Flipper McCoys in Virginia Beach. When I was there in April, they still had a ton of old stuff, like Gyruss, Time Pilot, Dig Dug, Burger Time, etc. Marty's Playland in Ocean City, MD used to have a nice collection of old games, but they didn't keep them repaired, and they had cleared them out in favor of ticket-dispensing slot machines last time I was there. There are probably places in PA and NJ, but I don't go up that way much, since it gets expensive paying all the tolls on I-95.
Jam it back in, in the dark.