Panels attended: 2
Games of Smash Bros won: 0
Dinosaurs busting moves: 1
Exits missed on the drive: 3
Admiral Biscuits met: 1
Among dragons, each of the princesses has her own badass epithet, based on her perceived embodiment of some draconic virtue.
Celestia is She Whose Fire Burns Hottest
Luna is She Whose Hoard Is Richest
Twilight Sparkle is She Whose Hunger Cannot Be Sated
Cadance is She Whose Passion Consumes All
Given that:
A) It's generally widely accepted that Equestria's cultural and technological development, relative to ours, only goes up to somewhere in the '80s at the very latest;
B) The only video game we've seen in canon is an arcade cabinet (in 'Hearts and Hooves Day');
"Oooh, what's this? 'Rainbow Jennifer Dash'? 
I didn't know you were a Maneonite too, Dashie!"
"Eh, not really. But Great-Grammy was, and Mom named me after her, so there ya go."
"Still, though! I've never heard of any pegasus Maneonites! I thought that was just an earth pony thing!"
Okay Rainbow, I think your Daring Do LARP has gone a little too far.
Given that:
A) It's generally widely accepted that Equestria's cultural and technological development, relative to ours, only goes up to somewhere in the '80s at the very latest;
B) The only video game we've seen in canon is an arcade cabinet (in 'Hearts and Hooves Day');
Why, then, does every single Button Mash story have him playing modern-day titles and genres, instead of Asteroids or Pac-Pony? 
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Because most of the people writing those fics weren't born when quarter-eaters were the big thing?
What FOME said. People write what they know, and they don't know their roots.
In addition, if it's going to be part of a story, note that playing classic video games is a notoriously solitary activity. Button can't be communicating with his gaming buddies over his headset when he's playing Asteroids.
I did write a blog-short on Button Mash Saves The Universe, but never expanded it. I grew up on Pac-Man and Asteroids and all kinds of quarter-eaters, including more pinball than was good for anybody. Good times in ancient history. (like your blog posts, which need updated :)
Hm. I've seen a it done both ways. Dunno what it was like in 2014.
Then again, I suppose you can blame "Don't Mine At Night" by Jan Animations.
Plus, the early fandom-idea of "Gamer Luna", which involved a newly returned Luna discovering the wonder of modern videogames, and I think may have preceeded Button Mash or any mention of videogames in the show, and as such may have colored the fanon for Button following in her hoofsteps.
Because cartoon logic. Probably 'nuff said.
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Because based on the evidence of Cheerilee's high school picture, they're probably in the 90s.
Their tech level is all over the place.
I still used arcades into the 90s and 00s. My dentist has an arcade cabinet in the waiting room and it's almost the 20s now. I don't buy Button's arcade cabinet as evidence of much.
As mentioned, the real answer is because Jan Animations. IMO.