They'll add a lot more titles over time. Obviously they can't nor wouldn't release more content than users would buy right from launch.
I'm not sure what's the point of having a virtual arcade if you can't hang out and meet random people though. Or hang out with friend list people who could play your games and vice versa. Maybe to give avatars a purpose other than 100 vs 1?
Better off just selling the titles like XBLA games if they don't intend to add social elements to the arcade concept.







