Arcade machine licensing tiers are essential for operators to understand when starting or expanding a gaming business. The most common types include revenue share, leasing, and direct purchase models. In a revenue share arrangement, the operator pays a percentage of the machine's earnings to the manufacturer or licensor, reducing upfront costs but sharing profits. Leasing involves paying a fixed monthly fee to use the machine, offering flexibility without long-term commitment. Direct purchase allows the operator to buy the machine outright, providing full ownership and control over revenue. Each tier has its pros and cons, such as varying initial investments, maintenance responsibilities, and profit potential. Operators should evaluate factors like location foot traffic, budget, and business goals to choose the best licensing tier for success in the competitive arcade industry.