Alright settle down, I know arcades will never die in our heads, and gamerooms are forever but lets be honest for a second, apart from a few wonderful, spots arcades are dead.
What for you was the biggest factor, as reading video game history etc everything seems to be aimed squarely at the home consoles, and for me personally at least, this just wasn't the case.
IMHO I felt that greed was the biggest factor, that is to say I didn't feel like these places were fun and for me anymore, with every video game being replaced by a jackpot machine or ticket spewing money grabber. Each new machine in place felt like another stab at tacking my money away and providing very little back.
The video game machines started charging more, this is something that I think was a bigger hit to us in the UK than in the states. Americans had a quater as the standard, which went up to 50c then 75 to a dollar etc, but ours seemed to jump from 10p to 50p to a pound, basically its like if pacman was a quater then ridge racer was two dollars. I Remember thinking that that it was now ten times the price for a go, so I wouldn't part with my money, if a machine was 50p I'd have a go, then follow that go with another, but a pound a time i just couldn't justify, even then it very much felt like just give us your money as quickly as possible and then leave.
At the high cost rate you couldn't justify learning the skills to be any good, my nan bought me Time crisis on the PSone and I remember being so grateful as I wouldn't have to keep feeding it... but if it was slightly cheaper I would have had no problems justifying the outlay.
The cost jumped, especially considering we started at 10p... it didn't seem to go 20, 30, 40, but I jumped 30 50 100, as a kid with limited funds theres no way you are going to put that sort of money into a new game you know nothing about that has a steep learning curve (sega's time traveller for example)
So that's my opinion, not ground breaking but I feel that the fun was lost and the money grabbers came in, so instead of making money they turned over for a quick quid and folded.