Chipboard weighs less than MDF and tends to sag less under it's own weight, in my experience. I haven't noticed much difference in the way it cuts. The dust doesn't seem to be quite as fine as that from MDF, but that's the only thing I've noticed.
Finishing, I suspect will be more difficult. The surface of chipboard isn't as smooth as MDF, so you may have to work to make it smooth. If you want a high-gloss finish, you'd probably in for a lot of work.
As an alternative to plain chipboard, allow me to suggest melamine-covered chipboard (a.k.a. "melamine"). TThis is basically chipboard with a layer of melamine plastic fused to the top. If you've seen the cheap, white bookshelves sold by discount furniture stores that's melamine. The good news is that you can get it in colors other than white. My local plywood supplier has black in stock and can special-order a variety of woodgrain looks. Black, it would seem to me, could be a great starting point for an arcade cabinet! You wouldn't have to do any finishing; just screw it together, apply the artwork to the sides, and you're done!
The downside to melamine is that the plastic coating is very thin and chips easily when cut with a saw. You need a really sharp saw blade (preferably one designed for melamine cutting) and it must be kept absolutely clean if you don't want your cuts to look like crap. Even so, you'll probably find that either the bottom or the top of the cut tends to chip; usually the bottom. That isn't a problem, as long as you plan your cuts precisely. If you get chipping on the bottom, then make sure that's the side of the material that will point toward the inside of the cabinet. If worse comes to worst, you can actually do a pretty good job of touching up the cuts using a black permanent marking pen (e.g. the "Sharpie" brand in the U.S.)