I don't see that specific business model coming back. With high bandwidth, and cheap parts the more profitable business model at the moment is online multiplayer games you can play from anywhere. You lose that in-person social aspect, but this a concern for the community not the business.
I would say Pokemon GO is a good example of an evolutionary / revolutionary game with roots in the arcade-genre. I would like to see more games like this with built-in necessity to bring people together.
A shame. A pipe dream of mine has always been to build the greatest mech sim there could be.
Maybe some mixture of peripherals, gesture tech and VR will have to be the way forward. But there really wouldn't be a replacement for getting in a cockpit-like booth complete with full haptic feedback.
It's not very common and about 15 years old, but if you can find the deluxe cabinet of Afterburner Climax it's a pretty fun experience. If you were to add VR and more modern technology, it would be pretty awesome.
There's still progress being made on this front in Japan. I remember seeing a few interesting haptic chair or cockpit games (and other interesting control schemes).
Starwing Paradox and Gundam: Senjo no Kizuna come to mind.
There's certainly a lot of nostalgia. Arcade games at the time of Street Fighter II were significantly more capable than home games; unless, you had a Neo Geo at home, because somehow $900 for the console and $200 for a game was affordable to you in the 90s. Around the end of the 90s, we started seeing arcade systems that were really supercharged consoles: Sega Naomi is a Dreamcast with more memory and runs from either roms or a ramdisk that caches a whole optical disk at boot. Into the 2000s and beyond, games based on PCs started appearing (some of which will show BIOS screens and windows boot logos at power on... others have the decency to disable video until after the arcade program has started). Most games are simply not impressive in the arcade anymore, unless they're huge, or have a compelling deluxe cabinet. This is part of why you don't see a couple games at a grocery/liquor store anymore --- they'd either have to be classic games, or take up too much space, or a multicade, there's not much coming out that's a standard cabinet, which is mostly what would fit (lots of new pinball though, but those won't fit were you could have had one pac-man, that later became one street fighter II).
The arcade style of game is of course very different than an MMO. There's not usually a lot of state saved between games; a handful of games let you setup a profile and keep upgrades between games, but most start you back at the bottom every time. That tends to make the games more immediate, and less grindy, but also they tend to be less deep. Although, if you want to grind, there's always redemption games.
One recent/current outlier is the Killer Queen arcade game: dedicated hardware, console ports that may capture the game but the in-person experience is entirely different and exclusive.
I would say Pokemon GO is a good example of an evolutionary / revolutionary game with roots in the arcade-genre. I would like to see more games like this with built-in necessity to bring people together.