Some people like to play [game console] games, especially ports of [arcade game]s, with original arcade controls. Others like to [emulator|emulate] classic games on a PC using software such as [MAME]. You can buy an expensive arcade style controller, or you can create your own.

An arcade [control panel] has several switches, generally [normally-open] [microswitch]es. A [joystick] has four switches, one for Up, Down, Left, and Right, and each [button] has a switch. Generally, an arcade board will see a separate pair of wires for each button.

A console controller, on the other hand, uses much cheaper switches made of a conductive pad under a [rubber] [membrane] under each button. It touches contact points on the normally-open [circuit] below and closes the circuit, which causes the encoder to register a button press. In addition, console controllers typically have an [encoder] that turns the [parallel] stream from its buttons into a [serial] stream that can be transmitted over a thinner cable. (The [Atari 2600] controller doesn't have an encoder; instead, it uses a simple common-ground make/break system.)

Here's how to modify an NES controller to act as an encoder for standard arcade controls:

Disconnect the controller from the Control Deck and open the controller.
Remove the buttons and their rubber pads.
Scratch off enough material from each contact point to reveal two separate bits of exposed copper.
[Solder] a wire to each bit of exposed copper. Take care not to [short circuit|short the circuit] with solder.
Connect the Start, B, and A wire pairs to your panel's buttons.
Connect the pairs from the joypad to your panel's 8-way joystick.
Connect the pair from Select to an additional button, or to a [coin mech] if your game supports it. (MAME does, some "arcade classics" series games do, and some homebrew console games do.)
Mount the circuit board under your arcade control panel.
Re-connect the controller to the console.

Make step 5 longer for newer consoles' controllers such as [Microsoft]'s [Sidewinder Game Pad] or [Sony]'s original [PlayStation] controller. Speaking of PlayStation, it's straightforward to make an encoder with 28 independent switches: start with two PS1 digital controllers, mod them as described above, and connect them to an [EMS USB2] adapter (http://secure.fragism.com/store/product_info.php/products_id/44).

[TheBooBooKitty] has found aftermarket game controllers easier to modify than controllers made by the console maker.

If you play PC ports of arcade games, or you use [MAME], and you don't want to tear up a Sidewinder, you may want to check out [Creating an encoder out of a keyboard] as well.

Creating an encoder out of a console game controller