and second question could I use such a thing to make a custom arcade stick?
A Teensy is essentially a very small Arduino. They cost around $13 and is about the size of a stick of gum. Pretty much any code you find for Arduino projects can be loaded on a Teensy.
Some of the cooler things it can do that the Arduino doesn't do natively is that it can emulate a keyboard, mouse, or Joystick. This is most likely what their code is doing. When an input pin is pulled low, it types something into a web form they made.
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