Optically-pumped magnetometers (OPMs) have recently reached sensitivity levels required for magnetoencephalography (MEG). OPMs do not need cryogenics and can thus be placed within millimetres from the scalp into an array that adapts to the invidual head size and shape, thereby reducing the distance from cortical sources to the sensors. Here, we quantified the improvement in recording MEG with hypothetical on-scalp OPM arrays compared to a 306-channel state-of-the-art SQUID array (102 magnetometers and 204 planar gradiometers). We simulated OPM arrays that measured either normal (nOPM; 102 sensors), tangential (tOPM; 204 sensors), or all components (aOPM; 306 sensors) of the magnetic field. We built forward models based on magnetic resonance images of 10 adult heads; we employed a three-compartment boundary element model and distributed current dipoles evenly across the cortical mantle. Compared to the SQUID magnetometers, nOPM and tOPM yielded 7.5 and 5.3 times higher signal power, while the correlations between the field patterns of source dipoles were reduced by factors of 2.8 and 3.6, respectively. Values of the field-pattern correlations were similar across nOPM, tOPM and SQUID gradiometers. The information capacities of the OPM arrays were clearly higher than that of the SQUID array. The dipole-localization accuracies of the arrays were similar while the minimum-norm-based point-spread functions were on average 2.4 and 2.5 times more spread for the SQUID array compared to nOPM and tOPM arrays, respectively. The results indicate that on-scalp MEG arrays offer clear benefits over a traditional SQUID array in several aspects of performance.