I was browsing a document on the history of Leicestershire in the UK. About halfway down the page, in the "Leicester in the 19th Century" section, it said:
Silver Arcade was built in 1899.
What does the word Arcade refer to here?
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A quick dictionary search shows the following:
1: a long arched building or gallery 2 : an arched covered passageway or avenue (as between shops) 3 : a series of arches with their columns or piers 4 : an amusement center having coin-operated games
The video game usage comes from the notion of a covered passageway or gallery. These galleries were often filled with mechanical, coin-operated games. (Penny arcades, etc.) Video games were the descendants of these forms of entertainment, so the name was extended to them.