This one’s a simple one. An “arcade” is a place with a lot of arches (it’s from the Latin “arco”). So a place with a lot of arches – something like a public walkway with a lot of shops that was sheltered from the element by a long tunnel or awning – fit the bill. From there the term began to be associated with any entertainment area. When video games came along, the “arcade” was a natural place to put all of the “arcade machines”. And from there, the term has taken on a life of its own.
– A few thoughts from your friend Saxo