Probably not. It's located in the Indian city of Darjeeling (yes, like the tea), which sits 7,000 feet above sea level. And while it's not much of an arcade, it still gets the record.
Lee Bradley, writing for the still-got-that-new-site-smell Bitmob, tells of his travels to both the city and the "arcade", which is really nothing more than "a collection of old televisions wired up to PlayStations". The software collection is extensive, consisting of an entire wall of pirated PS1 games, while we can only wish the arcade's pricing structure was seen over here a little more often, as "For just a few rupees the young boy that ran the arcade would grab the game of your choice, pop it into a PlayStation and keep you topped up with cups of Darjeeling's finest".
The full piece is well worth a read, for lovers of travel, fine tea and Street Fighter Alpha 3 alike.
The Highest Arcade in the World [Bitmob]