Using third-party intellectual property (IP) in arcade game machines requires careful attention to licensing agreements to avoid legal issues. Here’s what you need to know:

1. Obtain Permission: Securing a license from the IP owner is mandatory. This typically involves negotiating terms, paying royalties, and adhering to usage guidelines.

2. Types of Licenses: Licenses can vary—some may be exclusive, while others are non-exclusive. The scope (e.g., duration, territory, and platform) must be clearly defined.

3. Legal Compliance: Ensure compliance with copyright, trademark, and patent laws. Violations can lead to lawsuits or fines.

4. Royalty Agreements: Most licenses require royalty payments, either as a flat fee or a percentage of revenue.

5. Contract Review: Work with legal experts to review licensing contracts, ensuring all terms are fair and enforceable.

By following these steps, developers can legally integrate third-party IP into arcade games while minimizing risks. Always consult a legal professional for specific cases.