Arcade machines have evolved to include player-created content, but licensing remains a complex issue. Typically, arcade operators and game developers establish terms of service or end-user license agreements (EULAs) that define ownership and usage rights. Some companies retain full copyright over player submissions, while others allow limited creative freedom under specific conditions.

For example, modern arcade systems like rhythm games or fighting games may let players customize characters or stages, but these modifications often require approval to avoid copyright infringement. Indie arcade developers sometimes adopt open licensing models, encouraging community contributions while protecting intellectual property.

Legal frameworks vary by region, but most jurisdictions treat player-created content as derivative works, requiring explicit permission from original rights holders. Major arcade manufacturers implement content moderation systems to detect unauthorized material. The rise of blockchain-based licensing solutions may offer new approaches for verifying and compensating player creativity in arcade environments.

Ultimately, the handling of player-created content depends on the arcade platform's business model, with competitive esports titles being particularly strict about standardized content, while creative-focused cabinets may embrace user innovation within defined boundaries.