In my mind, one thing that can help set an arcade apart, beyond the game itself or unique controls is the type of display used. In classic era most stuff was raster-based and arcade hardware was capable of displaying games in resolutions you didn’t get at home; vector monitors were even more appealing as no one had a vector monitor in their home unless they bought a Vectrex. And of course there are projection systems which arcades began to use quite often in the 90’s before big screen displays were really common. In recent times new games were slow on the uptake to jump on the flat-panel HDTV bandwagon and even then it’s not as impressive since many consumers have a nice display at home. I see the way forward as either using higher-than 1080p displays, 3D stereoscopic displays or even better – the Raymodeler display by Sony.
It’s inevitable that the way arcades will go in the future is holographic technology or something similar and I’d say that this is similar enough. It seems unlikely that there will be one of these in every home in the next few years(it’s still in the prototype stage which means that it will be a little while before it’s ready for consumers anyways) and once questions of size, quality and cost are resolved so that it would be usable in arcades, I say strike while the iron is hot and it could lead to revolution in the industry, as long as the right game ideas are applied to the technology (controls too – one thing that would have made that Breakout clone they show in the video easier is a knob controller instead of an analog stick). It’s far better than stereoscopic 3D as no glasses are required and as far as I can tell it’s not working at tricking your brain like 3DTVs have to.The Raymodeler 3D is actually going to be on display in North America in a couple of days at SIGGRAPH 2010 in Los Angeles.
I should add that not every game type would be suitable for a such a display obviously – one is reminded of Sega’s Holosseum, which wasn’t a bad idea but didn’t have the right game content to really make it worthwhile.