A conversion kit is what you use to turn one arcade game into a different arcade game.
The earliest conversion kits were unlicensed bootleg Space Invaders kits (with tons of different names) used to convert older black & white games to the new money making Space Invaders. Almost all early conversion kits were bootlegs. The industry was just so strong back then that it was easy to sell entire machines, and the people who bought them knew that they would make their money back on them.
There were a few early authorized conversion kits. Like Pac-Man Plus, which converted Pac-Man and Ms. Pac-Man. Most early kits like that were game specific. There was a kit that turned Missile Command into Crystal Castles, and another that turned any Nintendo cabinet into a Nintendo Vs. Unisystem. Those early kits had to be game specific because not all games used compatible power supplies (or even had proper power supplies at all).
Universal conversion kits started coming on strong in 1984. Games weren't making as much money, and the operaters simply did not want to buy more cabinets when they already had hundreds of cabinets that were not making any money in the first place.
A universal conversion kit would normally consist of a new game PCB a marquee (oversized), a control panel overlay, and a new set of buttons and joysticks for the game. Some kits would also include sideart stickers, monitor bezels, and other graphical touchs. Almost every kit would also come with a new wiring harness, which would usually be JAMMA if the game was from 1986 or newer. These kits were designed for use with a standard inexpensive switching power supply, which the user would have to buy if his cabinet did not already have one.
The majority of games made from 1984 to the current year were available as conversion kits. Actually, to be more precise, the majority of games from 1984 to present were available only as conversion kits. Atari, Sega, and Midway were really the only companies making a lot of dedicated cabinets in the 1984 to 1998 era.
Today most games are either conversion kit only, or dedicated only. Joystick, trackball, and spinner games are usually only sold as conversion kits, while games with any other kind of controls are usually sold as dedicated machines. The only real exception is light gun games, which are usually sold in both formats due to both the demand of big light gun machines, and the ease of converting any old machine to a light gun game.
From time to time you can find NOS conversion kits on eBay for older games. Those are kits that never got installed back in the old days. Those kits allow you to do something pretty cool, and that is have a brand new game that might be 20 years old. You can drop that NOS conversion kit into a new generic arcade cabinet, and have yourself the nicest Bubble Bobble machine in the entire world.