"The Happy Bear" in Santa Fe, New Mexico. They operated under that moniker for the first half of the 1980's, after which they changed the name to "Jets" owing in part (I assume) to the installation in the place of a full-sized DC-9 cockpit mockup. Must have been part of an old flight trainer or something. I think they closed around 1995 or so.
Last time I went by the place it had become a wholesale outlet for Southwestern-style pottery.
But if you really wanted the kick-ass arcade experience the place to go was the Malibu Grand Prix track here in Albuquerque. Wall-to-wall (mostly) Atari cabs and of course go-karts. The Malibu is now a used car dealership, which is sort of ironic, but at least that's a more dignified fate than their track in Houston. That's just depressing...