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Soulcalibur III: Arcade Edition is a re-tuned and glitch-fixed version of Soulcalibur III that was first released in the arcades on April 3, 2006. Almost the entire cast from the home version returns as playable characters except Abyss, who is now a non-playable boss character alongside Night Terror. From the 17 bonus characters only three made it into the arcade: Hwang Seong-gyeong, Li Long and Amy Sorel, who have been reworked and expanded into more deep playing styles.

The total roster of the arcade ascends to 27 selectable characters. The game has three different modes: Training Mode, where one can try the characters' moves for a set time; Standard Mode, which is a traditional arcade mode with nine battles in a row, without cut scenes or endings; and Legends Mode, a complex eight-round mode based upon the creation of and competition between customized characters with accumulated skills taken from the home version's Chronicles of the Sword mode, such as increased stamina or the ability to automatically escape grapples.

The Standard mode brings back Inferno as a sub boss character (Stage 8). The only difference is Inferno will now only use a move set similar to Cervantes instead of randomly doing the moves of any character. Your ending boss for the standard mode can be either Night Terror if you get through 8 stages fast, Abyss if you get through pretty fast, or the Highest ranked Legends mode character if you end up getting through standard mode rather slow (8 minutes or higher). The number of times you continue does not seem to affect the boss you receive but the amount of aggression you show towards your opponents seems like it might have an effect.

Some aspects of the arcade edition were imported into the existing SoulCalibur III for the PS2 by C.AntonioFalcon of the 8wayrun forums.