Ultimately, and this may not be generically helpful, but I tracked my situation down to some shared-via-iCloud disk and GameCenter issues.
I am a developer person and was using Catalina during the great "Hey my iCloud Disks are all Messed Up" thing. This made me suspicious.
I also noticed that some of the errors signing in involved my Game Center account (looking at logs while trying to run Arcade apps showed complaints from `gamed` - the daemon associated with Game Center).
I have two macOS machines that I use iCloud sharing on + a bunch of iOS devices. Arcade works on all of my iOS devices and one of the macOS devices.
I did the following -
- on the 'non working' machine I deleted my Game Center account from the Internet Accounts panel
- on the 'non working' machine I logged out entirely from iCloud - Music, Arcade, the Store, etc.
- shut it down
- on the 'working' machine I logged out of iCloud. This logged me out of Music, Arcade, the Store, etc.
- I did not delete the Game Center account there before.
- shut it down
- reboot, chicken sacrifice, ritual dance, various prayers to various deities the 'non working' machine.
- logged back into iCloud on non-working machine
- waited for everything to get re-synched, iCloud disk stuff importantly.
- rebooted for good measure, habit, superstition, etc.
- ran Arcade game I had downloaded previously. Used to go to the screen you see at the beginning-
- this time it asked me to log into Game Center instead of taking me to the Arcade Buy Page!!!
- game continued to run, things worked, ran around house in celebration
- re-logged into iCloud on 'working' machine
- everything there back to system normal
YMMV, consult your doctor to see if signing in and out of things is right for you.