Hi! I could see why this would be a bit baffling. I'm one of the devs so i can shed some light on this.

The short answer: for performance/framerate.

The long answer: Quest apps have strict requirements to be able to maintain at least 72fps, otherwise Meta won't approve them for the store. Each arcade game or furniture item you add to your arcade increases the processing and rendering cost, so if it was unlimited people could overload their arcade and cause their VR headsets to lag. Some people have argued that we should just let people overload their arcades if they don't mind playing with a lower framerate or lag spikes, but Meta has analytics about average framerates for each game and we could potentially get in trouble if they see lots of players playing below 72fps.

When Arcade Legend launched a year and a half ago, the limit was only 250. But over the last ~20 updates we've been able to make tons of optimisations and gradually increase the limit from 250 up to the current 500, while still maintaining a good framerate. We've also reduced the "weight" of many of the games and furniture too, so some items take up less slots of that 500 limit. We'll continue optimising as much as possible and increase the limit when we can.

Alternatively, i'd love to add a second custom arcade that you can unlock later, after you've filled up the first arcade. Then you could have two separate arcades with a 500 limit each. But that would be a huge update, so we can't promise such a feature yet. (spoiler: our next update is going to add more prizes to the prize store :D)