The golden age of arcade video games was the period of rapid growth, technological development, and cultural influence of arcade video games from the late 1970s to the early 1980s. The release of Space Invaders in 1978 led to a wave of shoot-'em-up games such as Galaxian and the vector graphics-based Asteroids in 1979, made possible by new computing technology that had greater power and lower costs. Arcade video games switched from black-and-white to color, with titles such as Frogger and Centipede taking advantage of the visual opportunities of bright palettes.

Video game arcades became a part of popular culture and a primary channel for new games. Video game genres were still being established, but included space-themed shooter games such as Defender and Galaga, maze chase games that followed the design established by Pac-Man, driving and racing games which more frequently used 3D perspectives such as Turbo and Pole Position, character action games such as Pac-Man and Frogger, and the beginning of what would later be called platform games touched off by Donkey Kong. Games began starring named player characters, such as Pac-Man, Mario, and Q*bert, and some of these characters crossed over into other media including songs, cartoons, and movies. The 1982 film Tron was closely tied to an arcade game of the same name.

The golden age of arcade games began to wane in 1983 due to a plethora of clones of popular titles that saturated arcades, and the rise of home video game consoles, both coupled with a moral panic on the influence of arcades and video games on children. This fall occurred during the same time as the video game crash of 1983 but for different reasons, though both marred revenues within the North American video game industry for several years. The arcade game sector revitalized later during the early 1990s particularly with the mainstream success of fighting games.

Although the exact years differ, most sources agree the period lasted from about the late 1970s to early 1980s.

Technology journalist Jason Whittaker, in The Cyberspace Handbook, places the beginning of the golden age in 1978, with the release of Space Invaders. Video game journalist Steven L. Kent argues in his book The Ultimate History of Video Games that it began the following year, when Space Invaders gained popularity in the United States and when vector display technology, first seen in arcades in 1977's Space Wars, rose to prominence via Atari's Asteroids. Kent says the period ended in 1983, which saw "a fairly steady decline" in the coin-operated video game business and arcades.

RePlay magazine in 1985 dated the arcade industry's "video boom" years from 1979 to 1982. The golden age of arcade games largely coincided with, and partly fueled, the second generation of game consoles and the microcomputer revolution.

The golden age was a time of great technical and design creativity in arcade games. The era saw the rapid spread of not only video arcades across North America, Europe, and Asia. The number of video game arcades in North America was doubled between 1980 and 1982; reaching a peak of 10,000 video game arcades across the region (compared to 4,000 as of 1998). Beginning with Space Invaders, video arcade games also started to appear in supermarkets, restaurants, liquor stores, gas stations, and many other retail establishments looking for extra income. Video game arcades at the time became as common as convenience stores, while arcade games like Pac-Man and Space Invaders appeared in most locations across the United States, including even funeral homes. The sales of arcade video game machines increased during this period from $50 million in 1978 to $900 million in 1981, with 500,000 arcade machines sold in the United States at prices ranging as high as $3,000 in 1982 alone. By 1982, there were 24,000 full arcades, 400,000 arcade street locations and 1.5 million arcade machines active in North America. The market was very competitive; the average life span of an arcade game was four to six months. Some games like Robby Roto failed because they were too complex to learn quickly. Qix was briefly very popular but, Taito's Keith Egging later said, "too mystifying for gamers...impossible to master and when the novelty wore off, the game faded". Around this time, the home video game industry (second-generation video game consoles and early home computer games) emerged as "an outgrowth of the widespread success of video arcades".

In 1980, the U.S. arcade video game industry's revenue generated from quarters tripled to $2.8 billion. By 1981, the arcade video game industry in the United States was generating more than $5 billion a year with some estimates as high as $10.5 billion for all video games (arcade and home) in the U.S. that year, which was three times the amount spent on movie tickets in 1981. The total revenue for the U.S. arcade video game industry in 1981 was estimated at more than $7 billion though some analysts estimated the real amount may have been much higher. By 1982, video games accounted for 87% of the $8.9 billion in commercial games sales in the United States. In 1982, the arcade video game industry's revenue in quarters was estimated at $8 billion surpassing the annual gross revenue of both pop music ($4 billion) and Hollywood films ($3 billion) combined that year. It also exceeded the revenues of all major sports combined at the time, earning three times the combined ticket and television revenues of Major League Baseball, basketball, and American football, as well as earning twice as much as all the casinos in Nevada combined. This was also more than twice as much revenue as the $3.8 billion generated by the home video game industry (during the second generation of consoles) that same year; both the arcade and home markets combined added up to a total revenue between $11.8 billion and $12.8 billion for the U.S. video game industry in 1982. In comparison, the U.S. video game industry in 2011 generated total revenues between $16.3 billion and $16.6 billion.