Morgellon had a cool idea to build a clone of one of these games. ie press a button of the right color when you are told to do so, to keep the music playing.
So we are both working on 2 totally different ways to build such a device and randomly i stumbled across this awesome video. Instead of recreating the whole game, they built a tool to actually play the game. In the video this is not done with an Arduino, but it could be done with processing and an Arduino.