It’s interesting that you say interactive art installations have more interesting and sophisticated interfaces than arcade games (or pheraps games in genral). I find that the interaction design in games is far ahead of most new media art. By “interaction design” I include not just the design of the physical interface, but also what effects your interaction has. While new media art may in general engage more sophisticated concepts than most games, in the realm of interaction per se, I think games as a class beats new media hands down.