Competing with dedicated arcades and also competing with home video games. Like, the only arcade cabinets that are remotely of interest to me as an adult are the ones with a novel input mechanism— DDR, light gun games, and driving sims.
Everything else feels kind of pointless when I can play the same thing at home with way better graphics and no predatory progression nonsense.
A big climber and ballpit is 100x more novel to today's kids than a knockoff kart game or sidescrolling beat-em-up.