When Street Fighter IV was released it caused a parts shortfall for months. Joystick prices went through the roof ,with Madcatz Tournament Edition sticks going for more than 500 dollars on Ebay, order delays of over a month at popular arcade parts dealers like Lizardlick Amusements and Akihabara Shop, and even low quality clearanced sticks like the Hori EX2 dissapeared like Wiis at Christmas. So if you want to be prepared for the next installment of Capcom’s best fighting franchise you should get started early.
American Style or Japanese Style?

The First thing you will have to decide on is what kind of parts you are going to use. The two most popular styles of parts amongst joystick modders are the types seen in American and Japanese arcades respectively. If you’ve got fond memories of playing Turtles in Time or Street Fighter II from your youth you’ll be familiar with the American style of arcade parts. American joysticks are big, have bat shaped tops and are very springy. Japanese joysticks are lower in profile, have skinny shafts and ball shaped tops. Aside from cosmetic differences, the two styles of parts also feel very different. American joysticks spring back to neutral very quickly and when you rotate them through 360 degrees of motion it feels like a smooth circle. Japanese sticks, on the other hand, generally have a square restrictor plate so when you rotate the stick through 360 degrees of motion you will feel the corners of the square. Some players prefer this especially for charge characters like Guile because when you are holding down-back you can feel it. This is ultimately a personal preference so you’ll need to figure that out on your own. One thing to keep in mind though, is that American style parts require more room so the dimensions of your case will need to be taken into account.
Your Circuit Board

The difficulty of getting the internals of your joystick properly setup depends on which platform you are planning on using. For the Playstation 3 and the PC, the simplest option is the Cthulhu. A member of the shoryuken.com fighting game enthusiasts’ forum, who goes by the name of Toodles, makes a custom board called the Cthulhu, that simplifies the process of wiring your arcade parts to inserting the end of a wire in a hole and turning a screw. If you buy a pre-assembled kit, there is no soldering involved and the resulting joystick will work on both the PS3 and PC.
Things get a little more complicated when working with the Xbox 360 in mind. Microsoft uses a chip to prevent unlicensed controllers from working on their system so your only option is to break open a controller and get your soldering iron out. The easiest controller to start with is the Madcatz #4716 series. The job can be done with official wired and wireless Microsoft controllers as well but the soldering will be trickier.
The Housing

The housing you choose for your joystick can be anything from a custom made wooden or metal box, to an existing joystick you can pick up at retail and swap the parts out of, to Tupperware and shoeboxes. If getting a drill out is a bit too daunting, you have a number of options for picking up premade custom cases.
There are several websites that offer blank cases of many shapes, sizes and materials such as modchipman.com, gamingnow.net, and norrisarcadesticks.com. There are also members of the SRK forum who sell cases in their trading sub-forum as well.
Some may balk at the prices that these hand crafted cases command, but there are still options. You may be able to find the makings of a suitable case around the house or at a local department or hardware store. I made this joystick out of leftover parts, an old playstation controller and a case I picked up at the Container Store.

Made from a container store case
If you don’t have the tools necessary to modify a found container, picking up a retail controller with less than arcade quality parts is probably the simplest and quickest way to get started on your custom controller. The Hori Real Arcade Pro 3 is an excellent starting point. There is plenty of room inside to work with and you’re just an art and button swap away from having a custom joystick of your very own.

My custom Real Arcade Pro 3 that works on Ps3, PC and 360

An old Dreamcast stick repurposed for PS3 with a Sixaxis PCB wired in
For a far more detailed guide, and even several sample controller builds, head on over to slagcoin.com. they cover everything from basic parts and tools required, to arcade button layouts, to controller wiring diagrams. This may seem like a difficult task, but I was able to make three custom controllers without major mishap thanks to slagcoin and the helpful forum members at shoryuken.com and am currently working on two more.
Finally, check out the custom controller threads at SRK to see what people are doing with their customs.
http://forums.shoryuken.com/showthread.php?t=115479
http://forums.shoryuken.com/showthread.php?t=201537
Some stores worth checking out:
http://www.gamingnow.net
http://www.lizardlick.com
http://www.akihabarashop.co.jp
http://www.norrisarcadesticks.com
http://www.arcadeinabox.com
http://www.modchipman.com
http://www.tek-innovations.com
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