Plz read "Trigger Happy - Videogames & the Entertainment Revolution" by Steven Poole.
It would be too long to present Steven Poole (I stumbled upon his book while browsing to find a flash version of William's Defender), he appears to be an acknowledgeable author about video games in general, and about the arcade phenomenon in particular.
In fact, you may even download his updated book (in pdf format, under the Creative Common license) from his blog
A bit of confiotte (slang word for jam, gossip if you prefer) :
"From the design standpoint, I haven't seen any better history of the game industry, and more importantly what that history means, than Steven Poole's Trigger Happy.
Poole looks inwards, not outwards, not so much at what games do but at what they're about. The book is witty, well-written, and thoroughly-researched [...] I don't agree with all of Poole's conclusions, but that's all right: I admire the breadth of his vision and his willingness to wear his heart on his sleeve."