I think that the more important factor is that home console games are genuinely a better play experience than what's in arcades nowadays. The graphics are better, the game quality is better, etc.

Minecraft Dungeons vs. Minecraft Dungeons Arcade is an interesting case study. Introducing arcade mechanics designed to prompt kids to put more money into the machine legitimately makes the game less fun. Every few minutes you're interrupted and taken out of the game and back into meatspace so that you can put another couple dollars in the slot. And some of the more interesting elements of the game had to be removed because there's no saving your progress in the arcade. And you and your friends are crammed in around the cabinet, either constantly bumping each other with your elbows or playing in a mildly uncomfortable position to try and keep your elbows in. At home you can spread out on the couch or floor.

Back in the 80s and early 90s I put up with a poorer gameplay experience because arcade machines still had noticeably better graphics. (Dragon's Lair might be the poster child for this phenomenon.) But that just isn't the case anymore.

Well when you host a kids party at your home you now have to bring food and clean up. And chuck e cheese can handle a lot more screaming children than your home ever could.