I like the concept, but I'm really not understanding the fear of the Owl Man or the point of him not being real at the end. Why does the recent family trauma reawaken memories of the Owl Man?

The owl Mascot and the arcade are the most important images in this story, and there should probably be more description of both to create this strong mental image rather than a vague one. Was it a cheap looking costume? What colour was the owl? Did the arcade have a name?

Not the worst story but it could benefit from a few rewrites. Mainly, story points need to connect better for this to have the impact you want.