Living in Japan, I have always said "ma-me", but it turns out that it should be "maim":
"On December 24th, 1996, Nicola Salmoria began working on his single hardware emulators (for example Multi-Pac), which he merged into one program during January 1997. He named the accomplishment by the name of Multiple Arcade Machine Emulator, or MAME for short (pronounced as the word 'maim' in English, other languages may differ). ..."
