"Music Arcade" is a slow, contemplative song that talks about the mundane details of a day spent in the shadow of some big event. We're never told exactly what that event is, but it's left singer Neil Young feeling lost, alone, and "found out."
There's a twist in the song, though, as Young also talks about feeling so good that he's dancing down Main Street "dodging traffic with flying feet" and winning at the music arcade while some nameless band plays. Musically, the feel stays quietly somber throughout the song, but Young spends more time talking about how happy he was than how sad or lost.
The whole thing is ambiguous, but we do know that Young made Broken Arrow with the November 1995 death of record producer David Briggs heavy on his heart. Briggs was Young's close friend, and producer of his albums Neil Young, Everybody Knows This is Nowhere and After the Gold Rush.
One of the lyrics goes, "There's a comet in the sky tonight." Comet Hyakutake was discovered on January 31, 1996, months before the album was recorded. Scientists calculated it would pass very close to Earth during that March. When it did draw near it was brightly visible around the world. It's possible Young was singing about this in the song.
"Music Arcade" is the penultimate song on the Broken Arrow album, which Young produced himself. It's also the last newly composed song on the set, leading into Jimmy Reed's "Baby What You Want Me to Do."
As with the whole album, "Music Arcade" was recorded with Young's (in)famous band Crazy Horse. Frank "Poncho" Sampedro played guitar, Billy Talbot played bass and tambourine, Ralph Molina added percussion.