The impression I get is that while arcades aren't dead in Japan, they definitely got a huge damage judging from the fact that many old big arcades close one after another. And instead we get new ones like that who look more like amusement parks for normies and less than traditional arcades:
The Arcade will open on April 14th and includes AI DJs
www.timeextension.com
Then again most of the remaining big arcades also focus at stuff for casual wide audience like UFO catchers, photo booths, rhythm games etc. Of course I can't blame them from business aspect.