Growing up in the early to mid 1990s, visiting various arcades was truly fascinating. At home, the SNES already felt amazingly futuristic, and its games endlessly fascinated and impressed me. Yet, stepping into an arcade was like walking into a time machine ten years into the future. (From my perception and understanding of the world at the time.)
Daytona USA, Sega Rally and Cruis'n USA made my jaws drop to the floor and my eyes to become as big as saucers. As far as my mind could tell, these games were almost or basically at photo realism. The thought of ever playing such games at home felt like a joke; it was basically never going to happen.
Even the older arcade machines seemed ancient in comparison to the "big three" new ones I mentioned above. I mean the ones which used "sprite tricks" to build up a fake 3D world rather than actual polygons. Yet even those older ones were far beyond what consumer consoles up until the latter half of the 1990s could achieve at home.
I remember how jealous I was of this kid who had the lousy Virtua Racing port on his Mega Drive.
By the time I got my Sega Saturn and got to play Daytona USA and a demo of Sega Rally at home, in far inferior but still impressive versions (considering the cheap hardware it was ported to), words could not possibly describe how excited I was for the future.
But then, as the 1990s went on, the arcade games stopped impressing. Sega Rally and Daytona USA did get new games in their series, but they were nothing like the originals. By the time the Dreamcast came out, the gap was basically nonexistent. Instead of continuing to release amazingly beefy arcade machines, they started using the lame consumer console hardware! That took away most of the point of the arcade machines to me, the other of course being that you got to sit in a car-like seat with a wheel and pedals.
But why did this happen? Simply stating that "hardware got powerful enough to make affordable consumer devices" doesn't explain anything, because the whole point was that arcade machines could (and always did) cost a lot more than the consumer hardware, for obvious reasons. And that was their appeal; that they could contain expensive and specialized hardware configurations for each game, and deliver mind-blowing experiences.
In the mid-1990s, I was convinced that by year 2000, it would be possible to pay a buck in an arcade to play true photo-realistic simulations. That never happened. Now it's year 2020 and arcades don't at all exist in the form I think of them. The ones that still exist have nothing to do with either the classic 1980s "golden era" games/atmosphere, nor the 1990s "cutting edge hardware" era. It's just a bunch of lame, cheap PCs racked up with ugly chassis around them.
And before you say so, no, I don't consider anything that can be done at home to be "good enough" by any means. Games/simulations have gone backwards since the early 2000s as far as I'm concerned, less and less trying to look and behave like reality. However, this really is besides the point, because my question is why they didn't just keep using the same (obvious) philosophy for the arcades: beef them up with the most powerful hardware that money currently can buy, clustering it up if necessary, to deliver absolutely mind-blowingly realistic and complex 3D worlds which just cannot be done at home.
I don't understand why they seem to have said at some point in the late 1990s or early 2000: "I think we're done now. Let's stop caring." and everyone seemingly went along with it, even though there were endless opportunities to keep making fantastic and ever more realistic simulations.