The owners of California Amusements in Scratby, Yarmouth have requested permission to demolish their business and replace it with five homes.
Having submitted an application to Great Yarmouth Borough Council, they aim to build four semi-detached homes and a bungalow on the site after clearing.
Owners Mr and Mrs Oakey live in a static caravan at the rear of the arcade.
They have owned the property since the summer of 2011, and whilst the previous owners had gained planning approval to build two flats above the arcade, they were never constructed.
Great Yarmouth Borough council rejected a bid earlier this year from the Oakeys, whose initial plan was to tear down the arcade and build six homes on the site.
The site is designated a ‘Prime Commercial Holiday Area’ and it is not within Scratby current development boundaries.