Other resort arcades that were replaced failed to reappear, and like you said, there’s not really an obvious alternative.
I don’t think it’s been confirmed, but it is a big space so maybe something will survive. I personally doubt it though. My ideal setup would preserve the existing restaurant for quick service ice cream, providing needed seating that is currently only available outside. This would also allow the bar seating to stay. I would then use the arcade for the table service section, along with an expanded kitchen.
If video game systems didn’t kill the arcade concept then the smartphone/tablet certainly did. More arcade games are based on apps today rather than the opposite way around. My kids love the arcade but they don’t have phones and they’re also the minority today. There are always a handful of people in there, but even at Disney’s prices that can’t possibly generate the income an expanded B&C can. I’m not typically supportive of a financial decision like this, but to me this one makes sense and pluses the resort as a whole.