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Re: Steam Games that work well on an arcade cabinet. You might try Mercenary Kings, which is currently on Steam Early Access (it's in public beta basically). It's a Metal Slug/Mega Man style game where you also collect minerals to craft new guns.
The term arcade game is also used to refer to an action video game that was designed to play similarly to an arcade game with frantic, addictive gameplay. The focus of arcade action games is on the user's reflexes, and the games usually feature very little puzzle-solving, complex thinking, or strategy skills.