THE PACIFIC: SPOTLIGHT ON HIGH-GROWTH COMPANIES : Japanese Firms See More Than Fun in Games

Masaya Nakamura, chairman of Namco Ltd., struggled for years to win respect for the video game industry in Japan, including protection for game software and a better image for once-sleazy game parlors.

One of his tactics, he said in a recent interview, was to lecture arcade operators to run their businesses “in such a way that if their own children came into the arcade, they would be proud to say to them, ‘This is the work your father does.’ ”

The efforts of Nakamura, who founded Namco in 1955, have paid off by helping to create a positive image for game centers in Japan. That in turn has helped many video game companies maintain growing revenues in the midst of recession, and laid the groundwork for expansion into related fields such as operation of high-technology amusement parks.

According to a survey of Japan’s public firms for The Times, Namco and video game maker Sega Enterprises, respectively, had the highest average profit and revenue growth for the 1992-1993 two-year period.

But the leisure industry in general, including makers of recreational vehicles and camping equipment, is currently enjoying a boom in Japan, riding a wave of changing lifestyles.

“The general environment has provided additional free time to seek leisure,” said Nakamura, who served as chairman of the Japan Amusement Machine Manufacturers Assn. from 1981 to 1992. “Many companies have instituted five-day weeks. The national government has increased the number of holidays. . . . (Young people) have tended to move away from just pure materialistic amusement, and they are looking for more satisfaction from the games that they play.”

For entertainment firms, Nakamura said, this creates constant pressure to upgrade the quality of games and the environment in which they are used. Namco and other firms such as Sega have sought to meet this demand by producing ever-more-complicated and technically sophisticated games that can be enjoyed in a theme-park atmosphere.

Brightly lit, attractive game centers are now so ubiquitous in Japanese cities that some critics say people are forgetting how to have fun on their own.

“All over the city there are too many ready-made entertainment places run by big companies,” complained Shinobu Omiya, 31, a publishing company employee.

Most of these places present passive entertainment, she said, explaining that she prefers more participatory activities. However, Omiya admitted that she is not immune to the lure of electronic amusement centers.

“I like new things, so I’m not totally uninterested,” she confessed.

In that regard, Omiya has lots of company.

The Leisure Development Center, an affiliate of the Ministry of International Trade and Industry, estimates that 41 million Japanese, a third of Japan’s 124 million people, visited an amusement center at least once during 1993.

In recent years, “listening to music, playing home video games, going to video game centers, and auto-camping have . . . seen higher participation rates, frequency and spending,” the Leisure Development Center said in its report on recreation, which showed millions of Japanese enjoying a range of leisure pursuits from karaoke singing to visiting museums. These activities, the report said, “fit in nicely with the greater emphasis on family activities, now that the workweek is shorter, and . . . they are very popular with the children of the baby boomers, who are now coming into maturity.”

The popularity of video games and amusement centers--and the profitability of many companies in this industry--is boosted by efforts to upgrade the quality of the games. One of the latest fads is fortunetelling machines.

At the Hitech Sega Prime amusement center in Tokyo’s Shibuya district, nine fortunetelling machines are a major draw. Human fortunetellers, who can sometimes be found operating near Shinto shrines or out of their own residences, have always been popular in Japan. But the 500-yen ($5.05) price of a Sega machine-made fortune is much cheaper. Some customers also note that if they don’t like what the machine has to say, they can always dismiss it as just a game.

At Namco’s Wonder Eggs amusement park in suburban Tokyo, weekend visitors typically wait in line for 30 minutes or more for the fortunetelling attractions.

Namco’s X-Day machine, which predicts how long players are likely to live, is also selling far above expectations. Since it went on the market last year, 1,000 units have been sold, double the company’s initial projection. The machine asks players questions about their lifestyles, then gives an estimate of their probable life spans. Any player already older than projected is issued a document officially certifying him or her as a zombie.

The Love Love Simulation machine created by Kyugo Trade Co., an arcade game machine manufacturer, offers couples a chance to envision unborn children. When couples have their pictures taken by the machine, it produces an image that purports to show the face of the child they would produce together.

The point of leisure activity in Japan is “to get as far away as possible from your daily state of mind,” said Yoshiaki Takagi, 34.

“Japanese people in general, including me, are so absorbed in the realities of life that our spirits have withered,” he declared. “It seems to me that because of that, we’ve become good at escapism. . . . My work is in computer graphics, so I have no negative feelings about game centers and amusement parks. I have no objection to ready-made entertainment.”

Takagi added, however, that he also enjoys driving into the countryside, rolling up his trousers, sitting by a river and thinking about nothing at all. “When I do that,” he said, “I feel a reaffirmation that human beings are part of nature.”

Such urges to escape to the countryside are another force powering the leisure industry in Japan.

The market for various types of camping and other recreational vehicles has seen explosive growth in recent years, with sales jumping from 550,000 vehicles in 1989 to a projected 973,000 this year.

Toyota Motor Corp., which makes 40% of the recreational vehicles sold in Japan, is even moving into the auto campsite business in an effort to support the continued growth of such sales. The Construction Ministry is building an additional 180 such campsites throughout Japan, including 60 due for completion by early next year. Japan now has more than 2,500 campsites, which draw more than 13 million visitors annually, according to estimates by the Japan Auto Camping Federation.

Interest in camping and other outdoor activities has sparked a boom in sales of all sorts of related products, including rugged fashions for urban wear. Even foreign firms have found a piece of the action. L.L. Bean’s 1993 catalogue sales in Japan were nearly $60 million, according to the Maine-based company, and it has just opened its third store in Japan.

The total market for outdoor-leisure products, including camping gear, hiking boots, mountain bikes, backpacks and other items, is projected to hit $3.9 billion next year, up 80% since 1989, according to the Leisure Development Center.

Namco’s Nakamura, who shows a philosophical bent when he talks about his business, says the growth of leisure activities reflects the “spiritual” side of human beings. In contrast to stereotypes of the Japanese finding the meaning of life in work, Nakamura said he believes “man was placed on this Earth to play.”

“The ultimate objective for us,” Nakamura said, “is to make people happy.”

Times researcher Megumi Shimizu in Tokyo contributed to this article.