The production cost of an arcade machine is influenced by several crucial factors that determine the final price tag. First, the cabinet construction materials significantly impact costs, ranging from basic MDF wood to premium laminated finishes and custom artwork. The quality and type of display technology also plays a vital role, with CRT monitors historically being standard but modern LCD/LED screens offering different price points.

Hardware components represent another major cost factor. The game board or computer system, control interfaces (joysticks, buttons, trackballs), audio systems, and power supply units all contribute to the overall expense. Higher-quality components typically offer better durability and performance but increase production costs substantially.

Licensing and software development costs can't be overlooked. For modern arcades, game licensing fees from major publishers can be substantial, while original game development requires significant investment in programming, graphics, and sound design. The complexity of the game software directly affects these costs.

Labor and manufacturing processes also contribute significantly to the final price. Skilled labor for cabinet assembly, wiring, and quality control adds to production expenses. The manufacturing location, production volume, and assembly line efficiency all influence labor costs. Customization requests, such as special cabinet shapes, lighting effects, or premium finishes, can dramatically increase production time and costs.

Additional factors include the coin mechanism or payment system integration, regulatory compliance certifications, shipping logistics for large cabinets, and ongoing maintenance considerations. Manufacturers must balance these cost factors while ensuring the final product meets quality standards and market expectations. Understanding these elements helps explain why arcade machine prices vary widely from basic models to premium, feature-rich units.