Agree. X-Sector should be terrifying. Tacky arcades and the 'duck pond' in the middle really don't add to that, and the backdrop of trees and fields don't help either. I want more blackness, more steel fencing, more themeing features, and, if you must have an arcade, make sure the machines are chosen to fit in with the theme, not the crappy mishmash there is now. X-Sector could be SO much better with not too much work.
The thing is, X-sector hasnt changed since the place opened - the arcade has always been there - the majority of the arcade games have remained the same. In that respect, X-Sector has never really been "terrifying" in that respect - its fear factor came from the screams on oblivion or energiser - screams that have long since died down. I think its tired appearance takes away from the experience.
More steel fencing around the area might add to the atmosphere, but I just think that the whole area needs a revamp - give oblivion a lick of paint, removed submission, bring in one or two new flats and the area could be as good as new.