Arcade games have evolved a lot from early fortune-teller machines, slot machine like games, and whack-a-moles, and their manufacturers have also diversified or dropped out due to the rapid technological challenges. The arcade game companies can compete with the manufacturing of the machines, but not with the software porting.
The innovations these past few decades since the introduction of video games to arcades and fun houses have pushed old school arcade games to one side. Technology and the changing taste of kids in what they like to play with has dictated the arcade game industry’s directions. Whack-a-mole can’t hack it.
Nowadays, most arcade game companies have titles based on video games for consoles or PCs, before these are migrated to arcade video games. The list of home-grown arcade companies seem to be shrinking, with a lot of game titles coming from Japan and Asia. The competition brought about by big game manufacturers is hard to beat.