Arcade machines handle dynamic physics-based combat through a sophisticated combination of specialized hardware and optimized software architectures. Unlike modern gaming systems with complex physics engines, classic arcade cabinets relied on pre-calculated physics data and dedicated processing chips to create convincing combat interactions. The hardware featured custom processors specifically designed for rapid collision detection and response calculations, enabling real-time feedback when characters interacted.

Game developers employed clever techniques such as hitbox systems - invisible geometric shapes surrounding characters that determined collision outcomes. These hitboxes interacted according to predefined physical rules, creating the illusion of weight and impact without requiring complex real-time calculations. The system would reference pre-programmed physics tables containing information about character mass, attack force, and reaction animations, ensuring consistent performance despite hardware limitations.

Memory constraints led to innovative solutions like animation-based physics, where character movements contained built-in physical properties. When a punch connected, the game would trigger predetermined reaction sequences that simulated physical consequences, creating fluid combat flow. Modern arcade systems incorporate more advanced physics coprocessors that handle real-time calculations for debris, environmental destruction, and character momentum while maintaining the responsive gameplay essential to arcade experiences.

The balance between computational complexity and performance remains crucial, as arcade physics must feel immediate and predictable while appearing dynamically complex. This is achieved through layered systems where basic interactions process instantly while secondary effects like particle systems and environmental responses occur with slight delays, creating depth without compromising responsiveness that defines satisfying arcade combat.