The USB port on FPGA Arcade is wired to the ARM chip. If the ARM can do controller mode AND the firmware process this the right way it may work. Otherwise.. PS/2 port has to be used.
mikej/yaqube has to clarify.
Probably have to wait for the 060 daughtercard to be finished, as it appears to have 3 USB ports added to it that could be used for a keyboard and mouse.
@Belial6,
USB joysticks are junk and you would want to stick with the Amiga/Atari style digital joysticks instead. I bought one of those USB joysticks and sold it soon after, as the response time from it makes it almost unusable for most games.