:Namco

File:Nakamura Seisakusho Co. logo.svg

On June 1, 1955, Japanese businessman Masaya Nakamura founded {{nihongo foot|Nakamura Seisakusho Co., Ltd.,|株式会社中村製作所|Kabushiki gaisha Nakamura Seisakujo|lead=yes|group=lower-alpha}} in Ikegami, Tokyo.{{cite web |last1=Kikuchi |first1=Daisuke |title='Father of Pac-Man,' Masaya Nakamura, dies at age 91 |url=https://www.japantimes.co.jp/news/2017/01/30/national/father-pac-man-masaya-nakamura-dies-age-91/ |website=The Japan Times |access-date=August 16, 2020 |archive-url=https://web.archive.org/web/20171108023907/https://www.japantimes.co.jp/news/2017/01/30/national/father-pac-man-masaya-nakamura-dies-age-91/ |archive-date=November 8, 2017 |date=January 30, 2017}}{{cite web |title=Corporate History |url=https://www.bandainamcoent.co.jp/corporate/history/namco/index.html |website=Bandai Namco Entertainment |access-date=August 24, 2019 |archive-url=https://web.archive.org/web/20181210202633/https://www.bandainamcoent.co.jp/corporate/history/namco/index.html |archive-date=December 10, 2018 |language=ja}} The son of a shotgun repair business owner, Nakamura proved unable to find work in his chosen profession of ship building in the struggling post-World War II economy. Nakamura established his own company after his father's business saw success with producing pop cork guns.{{cite magazine |title=K. Endo Celebrated As AM Business Pioneer |url=https://onitama.tv/gamemachine/pdf/19880701p.pdf |access-date=July 21, 2020 |magazine=Game Machine |issue=335 |publisher=Amusement Press |date=July 1, 1988 |archive-url=https://web.archive.org/web/20200524032535/https://onitama.tv/gamemachine/pdf/19880701p.pdf |archive-date=May 24, 2020 |language=ja}} Beginning with only ¥300,000 (US$12,000), Nakamura spent the money on two hand-cranked rocking horses that he installed on the roof garden of a Matsuya department store in Yokohama.{{cite magazine |last1=Maeno |first1=Kazuhisa |title=Venture Business – Namco: Makers of the Video Age |magazine=Journal of Japanese Trade & Industry |publisher=Japanese Economic Foundation |date=November 4, 1985 |pages=38–40}}{{cite book|last=Kent |first=Steven L. |author-link=Steven L. Kent |title=The Ultimate History of Video Games: The Story Behind the Craze that Touched our Lives and Changed the World |date=2002 |publisher=Random House International |location=New York |isbn=978-0-7615-3643-7 |pages=74–77}}

The horses were loved by children and turned a decent profit for Nakamura, who began expanding his business to cover other smaller locations.{{cite book |last1=Smith |first1=Alexander |title=They Create Worlds |date=November 19, 2019 |publisher=CRC Press |location=Boca Raton|isbn=978-0-4297-5261-2 |pages=117–118}} A 1959 business reorganization renamed the company Nakamura Seisakusho Company, Ltd. The Mitsukoshi department store chain noticed his success in 1963, and approached him with the idea of constructing a rooftop amusement space for its store in Nihonbashi, Tokyo. It consisted of horse rides, a picture viewing machine, and a goldfish scooping pond, with the centerpiece being a moving train named Roadaway Race. The space was a hit and lead to Mitsukoshi requesting rooftop amusement parks for all of its stores.{{cite web |last1=Soble |first1=Jonathan |title=Masaya Nakamura, Whose Company Created Pac-Man, Dies at 91 |url=https://www.nytimes.com/2017/01/30/business/pac-man-masaya-nakamura-dead.html?_r=0 |website=The New York Times |access-date=July 27, 2020 |archive-url=https://web.archive.org/web/20200623140750/https://www.nytimes.com/2017/01/30/business/pac-man-masaya-nakamura-dead.html?_r=0 |archive-date=June 23, 2020 |date=January 30, 2017}}

Along with Taito, Rosen Enterprises, and Nihon Goraku Bussan, Nakamura Seisakusho became one of Japan's leading amusement companies. As the business grew in size, it used its clout to purchase amusement machines in bulk from other manufacturers at a discount, and then sell them to smaller outlets at full price. While its machines sold well, Nakamura Seisakusho lacked the manufacturing lines and distribution networks of its competitors, which made the production of them longer and more expensive.

The company was unable to place its machines inside stores because other manufacturers already had exclusive rights to these locations. In response, Nakamura Seisakusho opened a production plant in February 1966, moving its corporate office to a four-story building in Ōta, Tokyo. The company secured a deal with Walt Disney Productions to produce children's rides in the likenesses of its characters, in addition to those using popular anime characters like Q-Taro; this move allowed the business to further expand its operations and become a driving force in the Japanese coin-op market.{{cite web |last1=Plunkett |first1=Luke |title=How A Company Went From Rocking Horses To Pac-Man |url=https://kotaku.com/how-a-company-went-from-rocking-horses-to-pac-man-5788908 |website=Kotaku |access-date=July 20, 2020 |archive-url=https://web.archive.org/web/20200720201912/https://kotaku.com/how-a-company-went-from-rocking-horses-to-pac-man-5788908 |archive-date=July 20, 2020 |date=April 5, 2011}}

Though the manufacturing facility was largely reserved for its Disney and anime rides, Nakamura also used it to construct larger, more elaborate electro-mechanical games. The first of these was Torpedo Launcher (1965),{{Cite book|title=The Sega Arcade Revolution, A History in 62 Games|last=Horowitz|first=Ken|publisher=McFarland & Company|location=Jefferson, NC|year=2018|isbn=978-1-4766-3196-7 |pages=7–8}} a submarine warfare shooting gallery later titled Periscope.{{cite magazine |last=Lally |first=Ralph |date=January 1977 |volume=3 |number=1 |title=Projection Racing: Conversation with Masaya Nakamura, Inventor of F-1 |magazine=Play Meter |pages=13}} Its other products included Ultraman-themed gun games and pinball-like games branded with Osomatsu-kun characters.{{cite book |author1=Zaku |author2=Game Yume Area 51 |title=ギャラクシアン創世記 -澤野和則 伝- |trans-title=Galaxian Genesis -Kazunori Sawano Den- |date=November 12, 2017 |publisher=Junrinsha |language=ja |pages=21}}

The name Namco was introduced in 1971 as a brand for several of its machines.{{cite book |last1=Nishijima |first1=Takanori |title=新明解ナム語辞典 |trans-title=New Clear Nam Language Dictionary|date=December 1, 1987 |publisher=Softbank |isbn=978-4-930795-86-1 |language=ja}} The company grew to having ten employees, which included Nakamura himself. It saw continued success with its arcade games, which had become commonplace in bowling alleys and grocery stores.{{cite web |last1=Wong |first1=Alistar |title=Chasing Down Memories Of Making Arcade Racers With Namco Veteran Sho Osugi |url=https://www.siliconera.com/2019/03/11/chasing-down-memories-of-making-arcade-racers-with-namco-veteran-sho-osugi/ |website=Siliconera |access-date=October 13, 2019 |archive-url=https://web.archive.org/web/20190827174922/https://www.siliconera.com/2019/03/11/chasing-down-memories-of-making-arcade-racers-with-namco-veteran-sho-osugi/ |archive-date=August 27, 2019 |date=March 11, 2019}} The company also established a robotics division to produce robots for entertainment centers and festivals, such as those that distributed pamphlets, ribbon making machines, and a robot named Putan that solved pre-built mazes.{{cite magazine |last=Yamamoto |first=Yusaku |date=November 2011 |title=マッピーから『ギャラクシアン3』まで 「ナムコのメカ」を創った男が登場! |trans-title=The man who created Namco's mecha, from Mappy to Galaxian 3, is here! |magazine=Shooting Gameside|pages=68–71 |language=ja |translator=Alex Highsmith}}{{cite web |last1=Murakami |first1=Mazura |title=ナムコ社長「受付はロボットにしろ」 30年前の無茶ぶりを伝説的クリエイター陣が語る (2/3) |trans-title=President Namco "Reception should be a robot" – Legendary creators talk about the unreasonableness 30 years ago (2/3) |url=https://www.itmedia.co.jp/lifestyle/articles/1602/23/news006_2.html |website=ITMedia |access-date=April 8, 2020 |archive-url=https://web.archive.org/web/20160225083512/https://www.itmedia.co.jp/lifestyle/articles/1602/23/news006_2.html |archive-date=February 25, 2016 |language=ja |date=February 3, 2016}}

In August 1973, American game company Atari began establishing a series of divisions in Asia, one of which was named Atari Japan.{{cite book |last1=Smith |first1=Alexander |title=They Create Worlds |date=November 19, 2019 |publisher=CRC Press |location=Boca Raton|isbn=978-0-4297-5261-2 |pages=287–290}} Its president, Kenichi Takumi, approached Nakamura in early 1974 to have his business become the distributor of Atari games across Japan. Nakamura, already planning global expansion following his company's success, agreed to the deal. In part due to employee theft, Atari Japan was a financial disaster and nearly collapsed in its first few years of operation.

When Takumi stopped showing up to work, the company was handed to Hideyuki Nakajima, a former employee of the Japan Art Paper Company. Atari co-founder Nolan Bushnell, whose company was already struggling in America, chose to sell the Japanese division. His fixer, Ron Gordon, was given the task of finding the buyer for Atari Japan. After being turned down by Sega and Taito, Gordon's offer was accepted by Nakamura for {{yen}}296 million ($1.18M), though Nakamura informed Bushnell his company was unable to pay the money by the deadline. With no other takers for Atari Japan, Bushnell ultimately allowed Nakamura to only pay $550,000 and then $250,000 a year for three years. The acquisition allowed Nakamura Seisakusho to distribute Atari games across Japan, and would make it one of the country's largest arcade game companies.{{cite magazine |title=Atari Turns 25 |url=https://archive.org/details/199707replayatariarticle/page/n15/mode/2up |access-date=April 8, 2020 |magazine=RePlay |date=July 1997 |volume=22 |issue=10 |pages=Atari 28-Atari 30}}

The Atari Japan purchase was not an immediate success, in part due to the medal game fad of the 1970s. While Nakamura Seisakusho saw some success with imports such as Kee Games's Tank, the Japanese video game industry's decrease in popularity did not make them as profitable as hoped. The market became more viable once restrictions on medal games were imposed by the Japanese government in 1976, as Nakamura Seisakusho began returning higher profits; its import of Atari's Breakout was so successful that it led to rampant piracy in the industry. By the end of the year, Nakamura Seisakusho was one of Japan's leading video game companies.

File:July 1977 Namco trade advertisement announcing their name change.jpg featuring Masaya Nakamura announcing the change of corporate name]]

Nakamura Seisakusho changed its corporate name to Namco in June 1977. It opened a division in Hong Kong named Namco Enterprises Asia, which maintained video arcades and amusement centers. As Namco's presence in Japan was steadily rising, Nakajima suggested to Nakamura that he open a division in the United States to increase worldwide brand awareness.{{cite magazine |title=Namco America Opens With Bhutani Heading Up Office |date=September 23, 1978 |magazine=Cash Box |pages=53–55 |url=https://archive.org/details/cashbox40unse_17/page/53 |access-date=September 8, 2019}}{{cite book|last=Sheff|first=David|title=Game Over|title-link=Game Over (Sheff book)|publisher=Random House|year=1993|isbn=0-679-40469-4|location=New York|pages=239–242|author-link=David Sheff}} Nakamura agreed to the proposal, and on September 1, 1978, established Namco America in Sunnyvale, California. With Nakajima as its president and Satashi Bhutani as vice president, Namco America's aim was to import games and license them to companies such as Atari and Bally Manufacturing. Namco America would release a few non-video arcade games itself, such as Shoot Away (1977).{{cite magazine |title=Namco's AMOA Exhibit Will Focus On Four Machines |date=November 11, 1978 |magazine=Cash Box |page=C-16 |url=http://www.americanradiohistory.com/Archive-Cash-Box/70s/1978/CB-1978-11-11.pdf}}

As the video game industry prospered in Japan during the 1970s with the release of Taito's Space Invaders, Namco turned its attention towards making its own video games.{{cite book |last1=Koyama |first1=Nobuyuki |title=遊びのチカラ ナムコの高付加価値戦略 |trans-title=The Power of Play: Namco's High Value-Added Strategy |date=June 9, 2005 |publisher=Nikkei BP Planning |location=Tokyo |isbn=978-4-8613-0101-8 |language=ja}} While its licensed Atari games were still profitable, sales were decreasing and the quality of the hardware used began deteriorating. Per the recommendation of company engineer Shigekazu Ishimura, the company retrofitted its Ōta manufacturing facility into a small game division and purchased old stock computers from NEC for employees to study.

Namco released Gee Bee, its first original game, in October 1978.{{cite book |author1=Microcomputer BASIC Editorial Department |title=All About Namco |date=December 1986 |publisher=Dempa Shimbun |location=Tokyo |isbn=978-4-8855-4107-0 |language=ja}} Designed by new hire Toru Iwatani, it is a video pinball game that incorporates elements from Breakout and similar "block breaker" clones.{{cite book |title=Supercade |last=Burnham |first=Van |year=2001 |publisher=MIT Press |location=Cambridge |isbn=0-262-02492-6 |page=181}} Though Gee Bee fell short of the company's sales expectations and was unable to compete with games such as Space Invaders, it allowed Namco to gain a stronger foothold in the video game market.{{cite web |last1=Kurokawa |first1=Fumio |title=ビデオゲームの語り部たち 第4部：石村繁一氏が語るナムコの歴史と創業者・中村雅哉氏の魅力 |trans-title=Video game storytellers Part 4: The history of Namco and the charm of its founder, Masaya Nakamura, talked about by Shigekazu Ishimura |url=https://www.4gamer.net/games/999/G999905/20180313040/ |language=ja |website=4Gamer |access-date=August 2, 2019 |archive-url=https://web.archive.org/web/20190801205701/https://www.4gamer.net/games/999/G999905/20180313040/ |archive-date=August 1, 2019 |date=March 17, 2018}}

In 1979, Namco published its first major hit Galaxian, one of the first video games to incorporate RGB color graphics, score bonuses, and a tilemap hardware model.{{cite magazine |title=Arcade Games |magazine=JoyStik|date=September 1982 |volume=1 |issue=1 |publisher=Publications International |page=[https://archive.org/details/joystik_magazine-1982-09/page/n11 10] |url=https://archive.org/details/joystik_magazine-1982-09 |access-date=July 14, 2019}}{{cite book |title=Before the Crash: Early Video Game History |author=Mark J. P. Wolf |publisher=Wayne State University Press |location=Detroit |date=June 15, 2012 |page=173 |isbn=978-0-8143-3722-6 }} Galaxian is considered historically important for these innovations, and for its mechanics building off those in Space Invaders.{{cite book|last=Kent |first=Steven L. |author-link=Steven L. Kent |title=The Ultimate History of Video Games: The Story Behind the Craze that Touched our Lives and Changed the World |date=2002 |publisher=Random House International |location=New York |isbn=978-0-7615-3643-7 |pages=137–138}}{{cite web |last1=Clive |first1=Sir |title=Galaxian |url=https://www.eurogamer.net/articles/galaxian-review |website=Eurogamer |access-date=August 9, 2019 |archive-url=https://web.archive.org/web/20160304205630/http://www.eurogamer.net/articles/galaxian-review |archive-date=March 4, 2016 |url-status=live |date=October 25, 2007}} It was released in North America by Midway Manufacturing, the video game division of Bally, where it became one of its best-selling titles and formed a relationship between Midway and Namco.

File:Original PacMan.svg has been Namco's mascot since the character's introduction in 1980.{{cite web |title=ナムコ、往年の名作集ソフト第5弾 PS用「ナムコミュージアムVOL.5」を発売 |url=http://www.namco.co.jp/home/pr/1997/1997_february/news_february04.html |website=Namco WonderPage |access-date=April 14, 2021 |archive-url=https://web.archive.org/web/20000619081602/http://www.namco.co.jp/home/pr/1997/1997_february/news_february04.html |archive-date=June 19, 2000 |language=ja |date=February 1997}}|alt=Pac-Man in his "limbed" designed]]

The space shooter genre became ubiquitous by the end of the decade, with games such as Galaxian and Space Invaders becoming commonplace in Japanese amusement centers.{{cite web |last1=Pittman |first1=Jamey |title=The Pac-Man Dossier |url=https://www.gamedeveloper.com/design/the-pac-man-dossier |website=Gamasutra |access-date=February 1, 2020 |archive-url=https://web.archive.org/web/20200109075706/https://www.gamasutra.com/view/feature/132330/the_pacman_dossier.php |archive-date=January 9, 2020 |url-status=live |date=February 23, 2009}} As video games often depicted the killing of enemies and shooting of targets, the industry possessed a predominately male playerbase. Toru Iwatani began work on a maze video game that was targeted primarily towards women, with simplistic gameplay and recognizable characters. Alongside a small team, he created a game named Puck Man, where players controlled a character that had to eat dots in an enclosed maze while avoiding four ghosts that pursued them.

Iwatani based the gameplay off eating and designed its characters with soft colors and simplistic facial features.{{cite web |last1=Purchese |first1=Robert |title=Iwatani: Pac-Man was made for women |url=https://www.eurogamer.net/articles/iwatani-pac-man-was-made-for-women |website=Eurogamer |access-date=August 19, 2019 |archive-url=https://web.archive.org/web/20190304181633/https://www.eurogamer.net/articles/iwatani-pac-man-was-made-for-women |archive-date=March 4, 2019 |date=May 20, 2010}} Puck Man was test-marketed in Japan on May 22, 1980{{cite book|last=Kent |first=Steven L. |author-link=Steven L. Kent |title=The Ultimate History of Video Games: The Story Behind the Craze that Touched our Lives and Changed the World |date=2002 |publisher=Random House International |location=New York |isbn=978-0-7615-3643-7 |pages=141}}{{cite magazine |last1=Kohler |first1=Chris |title=Q&A: Pac-Man Creator Reflects on 30 Years of Dot-Eating |url=https://www.wired.com/2010/05/pac-man-30-years/ |magazine=Wired |access-date=February 1, 2020 |archive-url=https://web.archive.org/web/20190712174728/https://www.wired.com/2010/05/pac-man-30-years/ |archive-date=July 12, 2019 |date=May 21, 2010}} and given a wide-scale in July. It was only a modest success; players were more accustom to the shooting gameplay of Galaxian as opposed to Puck Man{{'}}s visually distinctive characters and gameplay style. In North America, it was released as Pac-Man in November 1980.{{cite magazine |title=Midway Bows New 'Pac-Man' Video |date=November 22, 1980 |magazine=Cash Box |page=42 |url=https://worldradiohistory.com/Archive-All-Music/Cash-Box/80s/1980/CB-1980-11-22.pdf| archive-url=https://web.archive.org/web/20200812191810/https://worldradiohistory.com/Archive-All-Music/Cash-Box/80s/1980/CB-1980-11-22.pdf| archive-date=2020-08-12}} Pac-Man{{'}}s simplicity and abstract characters made it a fixture in popular culture,{{cite web |last1=Champagne |first1=Christine |title=How "Pac-Man" Changed Games and Culture |url=https://www.fastcompany.com/1683023/how-pac-man-changed-games-and-culture |website=Fast Company |access-date=June 14, 2021 |archive-url=https://web.archive.org/web/20201204115431/https://www.fastcompany.com/1683023/how-pac-man-changed-games-and-culture |archive-date=December 4, 2020 |date=May 22, 2013}} spawning a multi-million-selling media franchise.{{cite web |title=Namco Networks' PAC-MAN Franchise Surpasses 30 Million Paid Transactions in the United States on Brew |url=https://www.businesswire.com/news/home/20100630005033/en/Namco-Networks’-PAC-MAN-Franchise-Surpasses-30-Million |website=Business Wire |access-date=August 8, 2020 |archive-url=https://web.archive.org/web/20170629204316/https://www.businesswire.com/news/home/20100630005033/en/Namco-Networks%E2%80%99-PAC-MAN-Franchise-Surpasses-30-Million |archive-date=June 29, 2017 |date=June 30, 2010}}

Namco regularly released several successful games throughout the early 1980s. It published Galaga, the follow-up to Galaxian, in 1981 to critical acclaim, usurping its predecessor in popularity with its fast-paced action and power-ups.{{cite web |last1=Birnbaum |first1=Mark |title=Galaga Review |url=https://www.ign.com/articles/2007/04/19/galaga-review |website=IGN |access-date=July 14, 2019 |archive-url=https://web.archive.org/web/20190429224526/https://www.ign.com/articles/2007/04/19/galaga-review |archive-date=April 29, 2019 |date=April 18, 2007}} 1982 saw the release of Pole Position, a racing game that is the first to use a real racetrack (the Fuji Speedway) and helped laydown the foundations for the racing genre.{{cite web |last1=Reilly |first1=Luke |title=The Top 10 Most Influential Racing Games Ever |url=https://www.ign.com/articles/2015/04/03/the-top-10-most-influential-racing-games-ever?page=2 |website=IGN |access-date=April 8, 2020 |archive-url=https://web.archive.org/web/20190603054912/https://www.ign.com/articles/2015/04/03/the-top-10-most-influential-racing-games-ever?page=2 |archive-date=June 3, 2019 |pages=1–2 |date=April 3, 2015}} It released Dig Dug the same year, a maze chaser that allowed players to create their own mazes.{{cite magazine |title=Dig Dug |url=https://archive.org/details/blip-magazine-01/page/n19 |access-date=August 18, 2019 |magazine=Blip Magazine |issue=1 |date=February 1983 |pages=18–19}}

Namco's biggest post-Pac-Man success was the vertical-scrolling shooter Xevious in 1983, designed by new-hire Masanobu Endō.{{cite web |last1=Grifford |first1=Kevin |title=Xevious: The 29-Year-Old Portmortem |url=http://www.1up.com/news/xevious-29-year-old-portmortem |website=1UP.com |access-date=May 11, 2020 |archive-url=https://web.archive.org/web/20120709210831/http://www.1up.com/news/xevious-29-year-old-portmortem |archive-date=July 9, 2012 |date=October 19, 2011}}{{cite web |last1=Savorelli |first1=Carlo |title=Xevious |url=http://www.hardcoregaming101.net/xevious/ |website=Hardcore Gaming 101 |access-date=March 31, 2020 |archive-url=https://web.archive.org/web/20190920143717/http://eb.archive.org/ |archive-date=September 20, 2019 |date=May 6, 2015 |url-status=live }} Xevious{{'}}s early usage of pre-rendered visuals,{{cite magazine|title=Top 100 Games of All Time |magazine=Next Generation|issue=21 |publisher=Imagine Media|date=September 1996|page=39}} boss fights, and a cohesive world made it an astounding success in Japan, recording record-breaking sales figures that had not been seen since Space Invaders.{{cite book |title=ARCADE GAMERS白書 : 完全保存版. vol.1. |trans-title=ARCADE GAMERS White Paper: Complete Preservation Edition, Vol . 1 |date=2010 |publisher=Mediaparu |location=Tokyo |isbn=978-4-8961-0108-9 |page=10 |language=ja}} The game's success led to merchandise, tournament play, and the first video game soundtrack album.{{cite web |last1=Savorelli |first1=Carlo |title=Xevious - Other |url=https://hg101.kontek.net/xevious/xevious3.htm |website=Hardcore Gaming 101 |access-date=May 11, 2020 |archive-url=https://web.archive.org/web/20190926030057/https://hg101.kontek.net/xevious/xevious3.htm |archive-date=September 26, 2019 |date=December 10, 2011}}{{cite web |last1=Ombler |first1=Mat |title=Are bootleg game soundtracks damaging the industry? |url=https://www.gamesindustry.biz/articles/2020-05-06-are-bootleg-video-game-soundtracks-damaging-the-industry |website=Gamesindustry.biz |access-date=May 11, 2020 |archive-url=https://web.archive.org/web/20200507205932/https://www.gamesindustry.biz/articles/2020-05-06-are-bootleg-video-game-soundtracks-damaging-the-industry |archive-date=May 7, 2020 |date=May 6, 2020}} The same year, Namco released Mappy, an early side-scrolling platformer,{{cite web |last1=Kalata |first1=Kurt |title=Mappy |url=http://www.hardcoregaming101.net/mappy/ |website=Hardcore Gaming 101 |access-date=July 20, 2020 |archive-url=https://web.archive.org/web/20191229083401/http://www.hardcoregaming101.net/mappy/ |archive-date=December 29, 2019 |date=June 15, 2018}} and the Pole Position sequel Pole Position II.{{cite web |last1=Buchanan |first1=Levi |title=Pole Position II |url=https://www.ign.com/articles/2006/01/17/pole-position-ii |website=IGN |date=January 17, 2006 |access-date=July 5, 2019 |archive-url=https://web.archive.org/web/20190703164147/https://www.ign.com/articles/2006/01/17/pole-position-ii |archive-date=July 3, 2019 |url-status=live }}

Endō went on to design The Tower of Druaga a year later, a maze game that helped establish the concept for the action role-playing game.{{cite web |last1=Parish |first1=Jeremy |title=What Happened to the Action RPG? |url=http://www.1up.com/features/what-happened-action-rpg.html |website=1UP.com |access-date=August 4, 2019 |archive-url=https://web.archive.org/web/20181003182911/http://www.1up.com/features/what-happened-action-rpg.html |archive-date=October 3, 2018 |date=July 30, 2012}} Druaga{{'}}s design influenced games such as Nintendo's The Legend of Zelda.{{cite web |last1=Pepe |first1=Felipe |title=1982–1987 – The Birth of Japanese RPGs, re-told in 15 Games |url=http://www.gamasutra.com/blogs/FelipePepe/20161010/282896/19821987__The_Birth_of_Japanese_RPGs_retold_in_15_Games.php |website=Gamasutra |access-date=August 3, 2019 |archive-url=https://web.archive.org/web/20181111063721/http://www.gamasutra.com/blogs/FelipePepe/20161010/282896/19821987__The_Birth_of_Japanese_RPGs_retold_in_15_Games.php |archive-date=November 11, 2018 |date=October 10, 2016}} 1984 also saw the release of Pac-Land, a Pac-Man-themed platform game that paved the way for similar games such as Super Mario Bros.,{{cite magazine |last1=Bevan |first1=Mike |title=The Ultimate Guide to Pac-Land |url=https://archive.org/details/RetroGamerIssue127-128/page/n67 |access-date=September 9, 2019 |magazine=Retro Gamer |publisher=Imagine Publishing |issue=127 |date=March 22, 2014 |pages=67–72}} and Gaplus, a moderately successful update to Galaga.{{cite magazine |last1=Campbell |first1=Stuart |title=The Definitive Galaxian |url=https://archive.org/stream/retro_gamer/RetroGamer_032#page/n73/mode/2up |access-date=September 22, 2019 |magazine=Retro Gamer |issue=32 |publisher=Imagine Publishing |date=December 2006 |pages=68–75}} The success of Namco's arcade games prompted it to launch its own print publication, Namco Community Magazine NG, to allow its fans to connect with developers.{{cite web |last1=Kurokawa |first1=Fumio |title=ビデオゲームの語り部たち 第7部：Mr.ドットマンこと小野 浩氏が，制約の中で追求した自由 |trans-title=Video game storytellers Part 7: Freedom pursued by Mr. Hiroshi Ono, also known as Mr. Dotman, within constraints |url=https://www.4gamer.net/games/999/G999905/20180721007/ |website=4Gamer.net |access-date=August 25, 2019 |archive-url=https://web.archive.org/web/20190331022546/https://www.4gamer.net/games/999/G999905/20180721007/ |archive-date=March 31, 2019 |date=July 28, 2018}}{{cite magazine |last1=Yoshida |first1=Ranbu |title=第12回 NG ゲーム人生回顧録 – 乱舞吉田 |trans-title=The 12th NG Game Life Memoirs – Ranbu Yoshida |url=https://www.famitsu.com/game/serial/2003/05/23/364,1053677810,12990,0,0.html |magazine=Famitsu |access-date=August 22, 2020 |archive-url=https://web.archive.org/web/20160401065143/https://www.famitsu.com/game/serial/2003/05/23/364,1053677810,12990,0,0.html |archive-date=April 1, 2016 |language=ja |date=March 24, 2002}}

File:Nintendo-Famicom-Console-Set-FL.jpg

In July 1983, Nintendo released the Family Computer, a video game console that utilized interchangeable cartridges to play games.{{cite magazine |title=Namco Releases Its "Galaxian" For Nintendo Family Computer |url=https://onitama.tv/gamemachine/pdf/19841001p.pdf |access-date=July 22, 2020 |magazine=Game Machine |issue=245 |publisher=Amusement Press |date=October 1, 1984 |archive-url=https://web.archive.org/web/20200523213432/https://onitama.tv/gamemachine/pdf/19841001p.pdf |archive-date=May 23, 2020 |language=ja |page=36}} The console's launch came with ports of some of Nintendo's popular arcade games, like Donkey Kong, which at the time were considered high quality. Though Namco recognized the system's potential to allow consumers to play accurate versions of its games, the company chose to hold off on the idea after its ports for platforms such as the Sord M5 flopped. Nakamura suggested that his son-in-law, Shigeichi Ishimura, work with a team to reverse-engineer and study the Famicom's hardware in the meantime.

His team created a conversion of Galaxian with their newfound knowledge of the console's capabilities, which exceeded the quality of previous home releases. The port was presented to Nintendo president Hiroshi Yamauchi alongside notification that Namco intended to release it with or without Nintendo's approval. Namco's demonstration was the impetus for Nintendo's decision to create a licensing program for the console. Namco signed a five-year royalties contract that included several preferential terms, such as the ability to produce its own cartridges.{{cite web |last1=McFerran |first1=Damien |title=Namco Founder Masaya Nakamura Dies Aged 91 |url=http://www.nintendolife.com/news/2017/01/namco_founder_masaya_nakamura_dies_aged_91 |website=Nintendo Life |access-date=April 9, 2020 |archive-url=https://web.archive.org/web/20190828032122/http://www.nintendolife.com/news/2017/01/namco_founder_masaya_nakamura_dies_aged_91 |archive-date=August 28, 2019 |date=January 30, 2017}}

A subsidiary named {{nihongo foot|Namcot|株式会社ナムコット|Kabushiki-gaisha Namukotto|group=lower-alpha}} was established in 1984 to act as Namco's console game division.{{cite web |last1=Smith |first1=David |title=Feature: What's In A Name? |url=http://www.1up.com/features/untitled_26?pager.offset=1 |website=1UP.com |access-date=May 25, 2020 |archive-url=https://web.archive.org/web/20121104204559/http://www.1up.com/features/untitled_26?pager.offset=1 |archive-date=November 4, 2012 |page=2 |date=June 13, 2005}} According to former Namco video game music composer {{ill|Norio Nakagata|ja|中潟憲雄}}, "T" means "Tomorrow" and was capitalised for emphasis.{{Cite tweet|author=中潟憲雄 |user=nkgt5 |number=1077574679202656262 |title=ナムコット創設時のメンバーだったY氏に尋ねてみたところ、TはtomorrowのTで、そこを強調する意味とデザイン上の意匠だそうです。当然ロゴなので社長決裁で、中村社長も納得されていたそうです。 |language=ja |date=2018-12-25 |access-date=2025-04-07}} Tomorrow was derived from EPCOT (Experimental Prototype Community of Tomorrow).{{Cite tweet|author=中潟憲雄 |user=nkgt5 |number=1382854522213584902 |title=ではなぜTomorrowなのか？ |language=ja |date=2021-04-15 |access-date=2025-04-07}} It released its first four titles in September: Galaxian, Pac-Man, Xevious, and Mappy.{{cite book |last1=Szczepaniak |first1=John |title=The Untold History of Japanese Game Developers |date=August 11, 2014 |publisher=SMG Szczepaniak |isbn=978-0-9929-2600-7 |pages=363 |edition=First }} Xevious sold over 1.5 million copies and became the Famicom's first "killer app".{{cite book|last=Sheff|first=David|title=Game Over|title-link=Game Over (Sheff book)|publisher=Random House|year=1993|isbn=0-679-40469-4|location=New York|page=70|author-link=David Sheff}}{{Cite magazine |last1=Endo |first1=Akihiro |title=100 selections of Famicom masterpiece software presented by Yuge Action category |date=June 2003 |publisher=Killtime Communication |magazine=Yuge |issue=7 |pages=6–12 }}{{cite web |title=Japan Platinum Game Chart |url=http://www.the-magicbox.com/Chart-JPPlatinum.shtml |website=The Magic Box |access-date=August 23, 2019 |archive-url=https://web.archive.org/web/20190801030711/http://www.the-magicbox.com/Chart-JPPlatinum.shtml |archive-date=August 1, 2019}} Namcot also began releasing games for the MSX, a popular Japanese computer. Namco's arcade game ports were considered high-quality and helped increase sales of the console.

Namcot was financially successful and became an important pillar within the company; when Namco moved its headquarters to Ōta, Tokyo in 1985, it used the profits generated from the Famicom conversion of Xevious to fund its construction (the building was nicknamed "Xevious" as a result).{{cite web |last1=Anderson |first1=John |title=The Demolition of Japan's Videogame History |url=https://killscreen.com/articles/the-demolition-of-japans-videogame-history/ |website=Kill Screen |access-date=August 24, 2019 |archive-url=https://web.archive.org/web/20190615214447/https://killscreen.com/articles/the-demolition-of-japans-videogame-history/ |archive-date=June 15, 2019 |date=March 24, 2016}} The Talking Aid, a speech impairment device, was part of the company's attempts in venturing into other markets.{{cite book |author1=Zaku |author2=Game Yume Area 51 |title=ギャラクシアン創世記 -澤野和則 伝- |trans-title=Galaxian Genesis -Kazunori Sawano Den- |date=November 12, 2017 |publisher=Junrinsha |language=ja |pages=36}}{{cite web |title=ナムコ、Windows CE搭載の福祉向け携帯端末「トーキングエイドIT」 |trans-title=Namco, Windows CE-equipped mobile terminal for welfare "Talking Aid IT" |url=https://k-tai.watch.impress.co.jp/cda/article/news_toppage/15980.html |website=Keitai Watch |access-date=July 20, 2020 |archive-url=https://web.archive.org/web/20200720194951/https://k-tai.watch.impress.co.jp/cda/article/news_toppage/15980.html |archive-date=July 20, 2020 |language=ja |date=October 9, 2003}}

By the time the Video game crash of 1983 concluded in 1985 with the release of the Nintendo Entertainment System (NES),{{cite magazine |title=Toy Trends |magazine=Orange Coast |date=December 1988 |volume=14 |issue=12 |publisher=Emmis Communications |page=88}}{{cite journal |author=Consalvo, Mia |year=2006 |title=Console video games and global corporations: Creating a hybrid culture |journal=New Media & Society |volume=8 |issue=1 |pages=117–137 |doi=10.1177/1461444806059921 |s2cid=32331292 }} Atari had effectively collapsed. After enduring numerous financial difficulties and losing its control in the industry, parent Warner Communications sold the company's personal computer and home console divisions to Commodore International founder Jack Tramiel, who renamed his company Tramel Technology to Atari Corporation.{{cite magazine |title=An Interview with Dan Van Elderen |magazine=Next Generation|issue=35 |publisher=Imagine Media |date=November 1997|page=82}}{{cite magazine|last=Thomas|first=Don |title=Atari's Historic Road to Nowhere|magazine=Next Generation|issue=24 |publisher=Imagine Media|date=December 1996|pages=97–104}} Warner was left with Atari's arcade game and computer software divisions, which it renamed Atari Games. Namco America purchased a 60% stake in Atari Games on February 4, 1985 through its AT Games subsidiary, with Warner holding the remaining 40%. The acquisition gave Namco the exclusive rights to distribute Atari games in Japan.

Nakamura began losing interest and patience in Atari Games not long after the acquisition. As he started viewing Atari as a competitor to Namco, he was hesitant to pour additional funds and resources into the company. Nakamura also disliked having to share ownership with Warner Communications. Nakajima grew frustrated with Nakamura's attempts at marketing Atari video games in Japan, and had constant disagreements with him over which direction to take the company.{{cite book|last=Kent |first=Steven L. |author-link=Steven L. Kent |title=The Ultimate History of Video Games: The Story Behind the Craze that Touched our Lives and Changed the World |date=2002 |publisher=Random House International |location=New York |isbn=978-0-7615-3643-7 |pages=371}} Viewing the majority-acquisition as a failure, in 1987 Namco America sold 33% of its ownership stake to a group of Atari Games employees led by Nakajima.{{Cite book |title=Hey! Listen!: A journey through the golden era of video games|last=McNeil|first=Steve|date=April 18, 2019 |publisher=Headline |location=London |isbn=978-1-4722-6134-2 |pages=104 }}

This prompted Nakajima to resign from Namco America and become president of Atari Games. He established Tengen, a publisher that challenged Nintendo's licensing restrictions for the NES by selling several unlicensed games, which included ports of Namco arcade games.{{cite web |last1=Parish |first1=Jeremy |title=Gauntlet – Pac-Man – R.B.I. Baseball retrospective: Tengen trio – NES Works #053 |url=https://www.youtube.com/watch?v=w8gHDiAf3-s |website=YouTube |access-date=April 9, 2020 |archive-url=https://web.archive.org/web/20200409172233/https://www.youtube.com/watch?v=w8gHDiAf3-s |archive-date=April 9, 2020 |date=October 9, 2019}}{{cite news|last1=Lazzareschi|first1=Carla|date=December 13, 1988|title=Claims Japanese Rival Monopolizes Market : Atari Games Sues Nintendo for $100 Million|work=Los Angeles Times|agency=|url=https://www.latimes.com/archives/la-xpm-1988-12-13-fi-193-story.html|access-date=April 8, 2020|archive-url=https://web.archive.org/web/20200225024426/https://www.latimes.com/archives/la-xpm-1988-12-13-fi-193-story.html|archive-date=February 25, 2020}} Though its selloff made Atari Games an independent entity, Namco still held a minority stake in the company and Nakamura retained his position as its board chairman until the middle of 1988.{{cite magazine |last1=Compasio |first1=Camille |title=Coin Machine – Around The Route |url=https://archive.org/details/cashbox52unse_3/page/n27/mode/2up |access-date=April 8, 2021 |magazine=Cash Box |date=August 6, 1988 |page=29}}

In Japan, Namco continued to see expeditious growth. It published Pro Baseball: Family Stadium for the Famicom, which was critically acclaimed{{cite magazine |title=「5月10日号特別付録 ファミコンロムカセット オールカタログ」 |trans-title=May 10 issue special appendix Famicom ROM cassette all catalog |magazine=Family Computer Magazine |issue=9 |publisher=Tokuma Shoten |date=May 19, 1991 |volume=7 |page=255}} and sold over 2.5 million copies.{{cite web |title=Game Search (based on Famitsu data) |url=https://sites.google.com/site/gamedatalibrary/game-search |website=Game Data Library |access-date=March 16, 2020 |archive-url=https://web.archive.org/web/20190424035430/https://sites.google.com/site/gamedatalibrary/game-search |archive-date=April 24, 2019 |date=March 1, 2020}} Its sequel, Pro Baseball: Family Stadium '87, sold an additional two million. In 1986, Namco entered the restaurant industry by acquiring the Italian Tomato café chain.{{cite web |author1=Clam Art Plus |title=「パックマン」「ゼビウス」…創業者の他界で思い返される"ナムコ伝説" |trans-title="Pac-Man" "Xevious" ... "Namco Legend" reminiscent of the founder's death |url=https://news.livedoor.com/article/detail/12618109/ |website=Livedoor |access-date=July 20, 2020 |archive-url=https://web.archive.org/web/20200720005047/https://news.livedoor.com/article/detail/12618109/ |archive-date=July 20, 2020 |language=ja |date=February 1, 2017}} It also released Sweet Land, a popular candy-themed prize machine.{{cite web |title=『ワニワニパニック』開発者からグループ会長にまで上り詰めた男が語る、ナムコ激動の40年。創業者・中村雅哉との思い出、バンダイ経営統合の舞台裏【バンダイナムコ前会長・石川祝男インタビュー：ゲームの企画書】 |trans-title=40 years of Namco's turbulence, told by a man who has gone from the developer of "Gator Panic" to the chairman of the group. Memories with founder Masaya Nakamura, behind the scenes of Bandai's management integration [Interview with former Chairman of Bandai Namco, Shukuo Ishikawa: Game plan] |url=https://news.denfaminicogamer.jp/projectbook/180914 |website=Den Famicogamer |access-date=February 19, 2020 |archive-url=https://web.archive.org/web/20200114070754/https://news.denfaminicogamer.jp/projectbook/180914 |archive-date=January 14, 2020 |date=September 14, 2018}}

One of Namco's biggest hits from the era was the racing game Final Lap from 1987. It is credited as the first arcade game to allow multiple machines to be connected—or "linked"—together to allow for additional players.{{cite web |title=Final Lap – Videogame by Namco |url=https://www.arcade-museum.com/game_detail.php?game_id=7797 |website=Killer List of Videogames |access-date=August 24, 2019 |archive-url=https://web.archive.org/web/20190325034651/https://www.arcade-museum.com/game_detail.php?game_id=7797 |archive-date=March 25, 2019}}{{cite magazine |last=Kelly |first=Nick |title=Arcades – Final Lap |url=https://archive.org/details/commodore-user-magazine-56/page/n101/mode/2up |magazine=Commodore User |issue=56 |publisher=EMAP Publishing |date=May 1988 |pages=102–103 |access-date=April 28, 2021}} Final Lap was one of the most-profitable coin-operated games of the era in Japan, remaining towards the top of sales charts for the rest of the decade.{{cite magazine|title=Game Machine's Best Hit Games 25 |magazine=Game Machine |issue=325 |publisher=Amusement Press |date=February 1, 1988 |page=23 |lang=ja}}{{cite magazine |title=Game Machine's Best Hit Games 25 |magazine=Game Machine |issue=360 |publisher=Amusement Press |date=July 15, 1989 |page=23 |lang=ja}}{{cite magazine |title=Game Machine's Best Hit Games 25 |magazine=Game Machine |issue=368 |publisher=Amusement Press |date=November 15, 1989 |page=23 |lang=ja}}

Namco's continued success in arcades provided its arcade division with the revenue and resources needed to fund its research and development (R&D) departments. Among their first creations was the helicopter shooter Metal Hawk in 1988, fitted in a motion simulator arcade cabinet.{{cite magazine |title=Confrontation: Coin-Op – Metal Hawk |url=https://archive.org/details/TheGamesMachineIssue17Apr89/page/n61/mode/2up |access-date=February 9, 2020 |magazine=The Games Machine |issue=17 |publisher=Newsfield Publications |date=April 1989 |page=62}} Its high development costs prevented it from being massed-produced. While most of its efforts were commercially unsuccessful, Namco grew interested in motion-based arcade games and began designing those at a larger scale.{{cite magazine |title=Namco: Leader of the Pac |magazine=Edge |issue=8 |publisher=Future plc |date=May 1994 |pages=54–61}}{{cite web |title=ドラグーンが飛翔した日 |trans-title=The Day the Dragoon Took Flight |url=https://www.bandainamcoent.co.jp/gallery/ayumi/archive/gala3/index.html |website=Bandai Namco |access-date=March 8, 2020 |archive-url=https://web.archive.org/web/20180514203740/http://bandainamcoent.co.jp/gallery/ayumi/archive/gala3/index.html |archive-date=May 14, 2018 |language=ja |date=February 21, 2005}} In 1988, Namco became involved in film production when it distributed the film Mirai Ninja in theaters,{{cite book |author1=Dr. Ishii |title=Nihon tokusatsu gensō eiga zenshū. |date=1997 |publisher=Keibunsha |location=Tokyo |isbn=978-4-7669-2706-1 |pages=328–330 |edition=Shohan |language=ja}} with a tie-in video game coinciding with its release.{{cite web |last1=Provost |first1=Hugo |title=Mirai Ninja |url=http://www.hardcoregaming101.net/mirai-ninja/ |website=Hardcore Gaming 101 |access-date=April 8, 2020 |archive-url=https://web.archive.org/web/20200408180703/http://www.hardcoregaming101.net/mirai-ninja/ |archive-date=April 8, 2020 |date=January 9, 2020}}

Namco also developed the beat 'em up Splatterhouse, which attracted attention for its fixture on gore and dismemberment,{{cite web |last1=Strangman |first1=Rob |title=Splatterhouse |url=https://hg101.kontek.net/splatterhouse/splatterhouse.htm |website=Hardcore Gaming 101 |access-date=April 8, 2020 |archive-url=https://web.archive.org/web/20190805181810/https://hg101.kontek.net/splatterhouse/splatterhouse.htm |archive-date=August 5, 2019 |date=May 20, 2006}} and Gator Panic, a derivative of Whack-a-Mole that became a mainstay in Japanese arcades and entertainment centers. In early 1989, Namco unveiled its System 21 arcade system, one of the earliest arcade boards to utilize true 3D polygonal graphics. Nicknamed "Polygonizer",{{cite magazine |last1=Harrison |first1=Phil |title=Arcades – Namco's Winning Streak |url=https://archive.org/stream/commodore-user-magazine-72/Commodore_User_Issue_72_1989_Sep#page/n89/mode/2up |access-date=July 20, 2020 |magazine=Commodore User |issue=72 |publisher=EMAP |date=September 1989 |pages=90–91}} the company demonstrated its power through the Formula One racer Winning Run.{{cite magazine |last1=Hogg |first1=Robin |title=Confrontation: Coin-Op |url=https://archive.org/stream/thegamesmachine-16/TheGamesMachine_16_Mar_1989#page/n69/mode/2up |access-date=July 20, 2020 |magazine=The Games Machine |issue=16 |publisher=Newsfield Publications |date=March 1989 |pages=68–71}}

With an arcade cabinet that shook and swayed the player as they drove, the game was seen as "a breakthrough product in term of programming technique"{{cite magazine |last1=Cook |first1=John |title=Winning Run |url=https://www.solvalou.com/arcade/reviews/41/398 |access-date=July 20, 2020 |magazine=Advanced Computer Entertainment |publisher=Future plc |date=October 1989 |archive-url=https://web.archive.org/web/20190514191324/https://www.solvalou.com/arcade/reviews/41/398 |archive-date=May 14, 2019}} and garnered significant attention from the press. Winning Run was commercially successful,{{cite magazine|title=Game Machine's Best Hit Games 25 – アップライト, コックピット型TVゲーム機 (Upright/Cockpit Videos)|magazine=Game Machine|issue=351|publisher=Amusement Press, Inc.|date=March 1, 1989|page=29|lang=ja}} convincing Namco to continue researching 3D video game hardware. Video arcades under the Namco banner continued opening up in Japan and overseas, such as the family-friendly Play City Carrot chain.{{cite web |last1=Ishii |first1=Zenji |title=石井ぜんじの「GGXX」ゲーセン放浪記 ～街中で見かける対戦状況～ |trans-title=Zenji Ishii's "GGXX" arcade wandering record-competition situation seen in the city- |url=https://game.watch.impress.co.jp/docs/20020715/ggxxc01.htm |website=Game Watch |access-date=April 8, 2020 |archive-url=https://web.archive.org/web/20170807061148/https://game.watch.impress.co.jp/docs/20020715/ggxxc01.htm |archive-date=August 7, 2017 |language=ja |date=July 15, 2002}}

Namco saw continued success in the consumer game market as a result of the "Famicom boom" in the late 1980s.{{cite magazine |last1=Matsuura |first1=Toshiyuki |title=Amusement Industry Flies High With New Products |magazine=Business Japan |publisher=Nihon Kōgyō Shinbun-Sha |date=July 1988 |pages=121–123}} By 1989, sales of games for the Famicom and NES accounted for 40% of its annual revenue.{{cite book|last=Sheff|first=David|title=Game Over|title-link=Game Over (Sheff book)|publisher=Random House|year=1993|isbn=0-679-40469-4|location=New York|page=74|author-link=David Sheff}} During the same time frame, the company's licensing contract with Nintendo expired; when Namco attempted to renew its license, Nintendo chose to revoke many of the preferential terms it originally possessed. Hiroshi Yamauchi insisted that all companies, including Namco, had to follow the same guidelines.

The revocation of Namco's terms enraged Nakamura, who announced the company would abandon Nintendo hardware and focus on production of games for competing systems such as the PC Engine. Executives resisted the idea, fearing it would severely impact the company financially. Against Nakamura's protest, Namco signed Nintendo's new licensee contract anyway. While it continued to produce games for Nintendo hardware, most of Namco's quality releases came from the PC Engine and Mega Drive.

File:Nintendo-Super-Famicom-Set-FL.jpg.|alt=The Nintendo Super Famicom]]

In 1989, it was reported that Namco was underway with developing its own video game console to compete against companies such as Nintendo and NEC.{{cite magazine |title=Kyoto D.C. Snubs Namco's Lawsuit |url=https://onitama.tv/gamemachine/pdf/19890401p.pdf |access-date=July 21, 2020 |magazine=Game Machine |issue=353 |date=April 1, 1989 |archive-url=https://web.archive.org/web/20200524173620/https://onitama.tv/gamemachine/pdf/19890401p.pdf |archive-date=May 24, 2020 |language=ja |page=26}} Electronic Gaming Monthly claimed that the system, which was nearing completion, featured hardware comparable to the then-upcoming Nintendo Super Famicom. According to company engineer Yutaka Isokawa, it was produced to compete against the Mega Drive, a 16-bit console by Namco's arcade rival Sega. With the console industry being crowded by other competing systems, publications were unsure how well it would perform in the market.{{cite magazine |last1=Harris |first1=Steve |title=The War Is About To Begin! |magazine=Electronic Gaming Monthly |issue=2 |publisher=EGM Media |date=July 1989 |page=32}} While the console was never released, it allowed Namco to familiarize itself with designing home video game hardware.{{cite book |last1=Szczepaniak |first1=John |title=The Untold History of Japanese Game Developers |date=August 4, 2014 |isbn=978-0-9929-2602-1 |pages=641–669 |publisher=SMG Szczepaniak }}

Tadashi Manabe replaced Nakamura as president of Namco on May 2, 1990.{{cite magazine |title=T. Manabe Was Apptd Namco's New President |url=https://onitama.tv/gamemachine/pdf/19900601p.pdf |access-date=July 22, 2020 |magazine=Game Machine |issue=381 |publisher=Amusement Press |date=June 1, 1990 |archive-url=https://web.archive.org/web/20200524204553/http://onitama.tv/gamemachine/pdf/19900601p.pdf |archive-date=May 24, 2020 |page=30 |language=ja}} Manabe, who had been the company's representative director since 1981, was tasked with strengthening relationships and teamwork ethics of management. Two months later, the company dissolved its remaining connections with Atari Games when Time Warner reacquired Namco America's remaining 40% stake in Atari Games. In return, Namco America was given Atari's video arcade management division, Atari Operations, allowing the company to operate video arcades across the United States.{{cite magazine |title=Namco, Atari Games Dissolve Capital Ties |url=https://onitama.tv/gamemachine/pdf/19900701p.pdf |access-date=July 22, 2020 |magazine=Game Machine |issue=383 |publisher=Amusement Press |date=July 1, 1990 |archive-url=https://web.archive.org/web/20200524175953/http://onitama.tv/gamemachine/pdf/19900701p.pdf |archive-date=May 24, 2020 |language=ja |page=34}} Namco began distributing games in North America directly from its US office, rather than through Atari.{{cite magazine |title=News Digest: Namco (Japanese Giant) Will Sell Its Games From Own U.S. Office |magazine=RePlay |date=November 1990 |volume=16 |issue=2 |page=28 |url=https://archive.org/details/re-play-volume-16-issue-no.-2-november-1990-600dpi/RePlay%20-%20Volume%2016%2C%20Issue%20No.%202%20-%20November%201990/page/28}}

Namco Hometek was established as the home console game division of Namco America; the latter's relations with Atari Games and Tengen made the company ineligible to become a Nintendo third-party licensee,{{cite magazine |title=Namco Ltd. Reports Its Earnings '89 |url=https://onitama.tv/gamemachine/pdf/19900615p.pdf |access-date=July 22, 2020 |magazine=Game Machine |publisher=Amusement Press |date=June 15, 1990 |archive-url=https://web.archive.org/web/20200524060845/http://onitama.tv/gamemachine/pdf/19900615p.pdf |archive-date=May 24, 2020 |language=Japanese |number=382 |page=26}} instead relying on publishers such as Bandai to release its games in North America. In Japan, Namco developed two theme park attractions, which were demonstrated at the 1990 International Garden and Greenery Exposition (Expo '90): Galaxian3: Project Dragoon, a 3D rail shooter that supported 28 players, and a dark ride based on The Tower of Druaga.{{cite web |title=花博で芽吹いた「ハイパーエンターテイメント構想」～参加体験型アトラクションの誕生～ |trans-title="Hyper Entertainment Concept" that sprouted at the Expo-Birth of Participatory Experience-based Attractions- |url=https://dengekionline.com/special/challenge/we/we01.html |website=Dengeki |publisher=ASCII Media Works |access-date=August 4, 2019 |archive-url=https://web.archive.org/web/20190424041723/http://dengekionline.com/special/challenge/we/we01.html |archive-date=April 24, 2019}}{{cite magazine |title=Namco's Two Attractions in Expo '90 |url=https://onitama.tv/gamemachine/pdf/19900515p.pdf |access-date=July 22, 2020 |magazine=Game Machine |issue=380 |publisher=Amusement Press |date=May 15, 1990 |archive-url=https://web.archive.org/web/20200523162533/http://onitama.tv/gamemachine/pdf/19900515p.pdf |archive-date=May 23, 2020 |language=ja |page=30}}

As part of the company's idea of "hyperentertainment" video games, Namco engineers had drafted ideas for a possible theme park based on Namco's experience with designing and operating indoor play areas and entertainment complexes. Both attractions were commercially successful and among the most popular of Expo 90's exhibitions.{{cite magazine |last1=Davies |first1=Jonti |title=The Making of Starblade |magazine=Retro Gamer |publisher=Imagine Publishing |issue=68 |date=October 2009 |page=44}} In arcades, Namco released Starblade, a 3D rail shooter noteworthy for its cinematic presentation.{{cite magazine |last1=Rignall |first1=Julian |title=Arcade Action: Starblade |url=https://www.solvalou.com/arcade/reviews/208/327 |access-date=September 21, 2019 |magazine=Computer + Video Games |publisher=Future Publishing|date=April 1992 |archive-url=https://web.archive.org/web/20190916033552/https://www.solvalou.com/arcade/reviews/208/327 |archive-date=September 16, 2019 |pages=71–72}} This led to Namco dominating the Japanese dedicated arcade cabinet charts by October 1991, holding the top six positions that month with Starblade at the top.{{cite magazine |title=Namco Dominates Dedicated Games |magazine=Leisure Line |date=November 1991 |page=15 |publisher=Leisure & Allied Industries |location=Australia |url=https://archive.org/details/Leisure_Line_1991-11_Leisure_Allied_Industries_AU/page/n14}}

In February 1992, Namco opened its own theme park, Wonder Eggs, in the Futakotamagawa Time Spark area in Setagaya, Tokyo.{{cite magazine |title=Namco To Open New Theme Park in Ikebukuro |url=https://archive.org/details/Leisure_Line_1996-03_Leisure_Allied_Industries_AU/page/n49 |access-date=August 24, 2019 |magazine=Leisure Line |publisher=Leisure & Allied Industries |date=March 1996}} Described as an "urban amusement center", Wonder Eggs was the first amusement park operated by a video game company.{{cite web |title=もう一度だけ行きたい―― 重苦しい90年代を支えた大人の遊び場「ナムコ・ワンダーエッグ」の思い出 |url=https://news.yahoo.co.jp/articles/f61e2782668309d70a5dbaac63b0fc0c7a2c05a9 |website=Yahoo! News |access-date=February 21, 2021 |archive-url=https://web.archive.org/web/20210203012048/https://news.yahoo.co.jp/articles/f61e2782668309d70a5dbaac63b0fc0c7a2c05a9 |archive-date=February 3, 2021 |language=ja |date=February 3, 2021}} In addition to Galaxian3 and The Tower of Druaga, the park featured carnival games, carousels, motion simulators, and Fighter Camp, the first flight simulator available to the public.{{cite magazine |title=Namco Plans To Open High-Tech Theme Park |url=https://onitama.tv/gamemachine/pdf/19920101p.pdf |access-date=July 23, 2020 |magazine=Game Machine |issue=418 |publisher=Amusement Press |date=January 15, 1992 |archive-url=https://web.archive.org/web/20200524004931/https://onitama.tv/gamemachine/pdf/19920101p.pdf |archive-date=May 24, 2020 |language=ja |page=38}}{{cite magazine |title=Wonder Egg? |url=https://archive.org/details/Ultra_Game_Players_90_November_1996_U/page/n85/mode/2up |access-date=April 10, 2020 |magazine=Ultra Game Players |issue=90 |publisher=Imagine Publishing |date=November 1996 |page=87}} The park saw regularly high attendance numbers; 500,000 visitors attended in its first few months of operation and over one million by the end of the year.{{cite web |title=History of Wonder Eggs – 1992 |url=http://www.namco.co.jp/home/tp/we3/museum/history/1992.html |website=Namco |access-date=April 10, 2020 |archive-url=https://web.archive.org/web/20020816020745/http://www.namco.co.jp/home/tp/we3/museum/history/1992.html |archive-date=August 16, 2002 |language=ja |date=2001}}{{cite web |title=The History of Wonder Eggs – 1993 |url=http://www.namco.co.jp/home/tp/we3/museum/history/1993.html |website=Namco |access-date=April 10, 2020 |archive-url=https://web.archive.org/web/20021002210717/http://www.namco.co.jp/home/tp/we3/museum/history/1993.html |archive-date=October 2, 2002 |language=ja |date=2001}}

Namco created the park out of its interest in designing a Disneyland-inspired theme park that featured the same kind of stories and characters present in its games.{{cite web |last1=Burkett |first1=Stephen |last2=Greening |first2=Chris |title=Hiroyuki Kawada Interview: Namco Sounds in the 1980s |url=http://www.vgmonline.net/hiroyukikawadainterview/ |website=VGMOnline |date=September 18, 2016 |access-date=August 17, 2020 |archive-url=https://web.archive.org/web/20191229164626/http://www.vgmonline.net/hiroyukikawadainterview/ |archive-date=December 29, 2019 |url-status=live }} Wonder Eggs contributed to Namco's 34% increase in revenue by December 1992.{{cite magazine |title="St. Fighter II" Has Big Effect On Results |url=http://onitama.tv/gamemachine/pdf/19921215p.pdf |access-date=July 23, 2020 |magazine=Game Machine |issue=440 |publisher=Amusement Press |date=December 15, 1992 |archive-url=https://web.archive.org/web/20200522172326/http://onitama.tv/gamemachine/pdf/19921215p.pdf |archive-date=May 22, 2020 |language=ja |page=30}} Namco also designed smaller, indoor theme parks for its larger entertainment complexes across the country, such as Plabo Sennichimae Tempo in Osaka.

File:Ridge racer full scale stockton.jpg

Manabe resigned as president on May 1, 1992 due to a serious anxiety disorder, and Nakamura once again assumed the role.{{cite magazine |title=ナムコのトップ異動 |url=http://onitama.tv/gamemachine/pdf/19920501p.pdf |access-date=July 27, 2020 |magazine=Game Machine |issue=425 |publisher=Amusement Press |date=May 1, 1992 |archive-url=https://web.archive.org/web/20200523153053/http://onitama.tv/gamemachine/pdf/19920501p.pdf |archive-date=May 23, 2020 |page=1 |language=ja}} Manabe instead served as the company's vice chairman until his death in 1994.{{cite magazine |title=T. Manabe, Namco's Vice Chairman, Dies |url=https://onitama.tv/gamemachine/pdf/19940615p.pdf |access-date=July 23, 2020 |magazine=Game Machine |issue=474 |publisher=Amusement Press |date=July 15, 1994 |archive-url=https://web.archive.org/web/20200523192957/http://onitama.tv/gamemachine/pdf/19940615p.pdf |archive-date=May 23, 2020 |location=Japan |page=26 |language=ja}} The company's arcade division, in the meantime, began work on a new 3D arcade board named System 22, capable of displaying polygonal 3D models with fully-textured graphics. Namco enlisted the help of Evans & Sutherland, a designer of combat flight simulators for The Pentagon, to assist in the board's development.{{cite news |last1=Mintz |first1=John |title=From The War Room to the Game Room |url=https://www.washingtonpost.com/archive/politics/1993/07/13/from-the-war-room-to-the-game-room/a7414aad-a209-4fa6-abda-44976d34a299/ |newspaper=The Washington Post |access-date=November 14, 2020 |date=July 13, 1993 |archive-date=February 9, 2021 |archive-url=https://web.archive.org/web/20210209110321/https://www.washingtonpost.com/archive/politics/1993/07/13/from-the-war-room-to-the-game-room/a7414aad-a209-4fa6-abda-44976d34a299/ |url-status=live }}

The System 22 powered Ridge Racer, a racing game, in 1993.{{cite magazine |title=Arcade – Namco |url=https://archive.org/details/ultimatefuturegames11/page/n61/mode/2up |access-date=July 24, 2020 |magazine=Ultimate Future Games |issue=11 |publisher=Future Publishing |date=October 1995 |pages=62–65}} Ridge Racer usage of 3D textured polygons and drifting made it a popular title in arcades and one of Namco's most-successful releases, and is labeled a milestone in 3D computer graphics.{{cite web |last1=Shea |first1=Cam |last2=Reilly |first2=Luke |title=The Best Racing Games of All Time |url=https://www.ign.com/articles/the-best-racing-games-of-all-time |website=IGN |access-date=July 28, 2020 |archive-url=https://web.archive.org/web/20200728195333/https://www.ign.com/articles/the-best-racing-games-of-all-time |archive-date=July 28, 2020 |date=July 28, 2020}} The company followed its success with Tekken, a 3D fighting game, a year later.{{cite web |last1=Langshaw |first1=Mark |title=Tekken retrospective: How the 3D brawler rose to power |url=https://www.digitalspy.com/videogames/retro-gaming/a617582/tekken-retrospective-how-the-3d-brawler-rose-to-power/ |website=Digital Spy |access-date=December 14, 2020 |archive-url=https://web.archive.org/web/20201214192220/https://www.digitalspy.com/videogames/retro-gaming/a617582/tekken-retrospective-how-the-3d-brawler-rose-to-power/ |archive-date=December 14, 2020 |date=December 20, 2014}} Designed by Seiichi Ishii, the co-creator of Sega's landmark fighting game Virtua Fighter, Tekken{{'}}s wide array of playable characters and consistent framerate helped it outperform Sega's game in popularity, and launched a multi-million-selling franchise as a result.{{cite web |author1=Sato |title=Tekken 7's 5 Million Units Shipped Celebrated With Artwork Update; Tekken Series Reaches 49 Million |url=https://www.siliconera.com/tekken-7-celebrates-5-million-units-shipped-with-updated-artwork-tekken-series-reaches-49-million/ |website=Siliconera |date=February 21, 2020 |access-date=February 26, 2020 |archive-url=https://web.archive.org/web/20200226121148/https://www.siliconera.com/tekken-7-celebrates-5-million-units-shipped-with-updated-artwork-tekken-series-reaches-49-million/ |archive-date=February 26, 2020 |url-status=live }}

The company continued expanding its operations overseas, such as the acquisition of Bally's Aladdin's Castle, Inc., the owners of the Aladdin's Castle chain of mall arcades.{{cite magazine |title=Namco Purchases Aladdins Castle |url=https://onitama.tv/gamemachine/pdf/19930201p.pdf |access-date=July 23, 2020 |magazine=Game Machine |issue=442 |publisher=Amusement Press |date=February 1, 1993 |archive-url=https://web.archive.org/web/20200524063818/http://onitama.tv/gamemachine/pdf/19930201p.pdf |archive-date=May 24, 2020 |language=ja |page=26}} In December, Namco acquired Nikkatsu, Japan's oldest-surviving film studio that at the time was undergoing bankruptcy procedures.{{cite web|last1=Frater|first1=Patrick|title='Pac-Man' Pioneer Masaya Nakamura, Founder of Namco, Dies at 91|url=https://variety.com/2017/film/asia/pac-man-pioneer-masaya-nakamura-founder-of-namco-dead-at-96-1201973117/|access-date=January 30, 2017|website=Variety|date=January 30, 2017|archive-date=February 9, 2021|archive-url=https://web.archive.org/web/20210209110312/https://variety.com/2017/film/asia/pac-man-pioneer-masaya-nakamura-founder-of-namco-dead-at-96-1201973117/|url-status=live}}{{cite magazine |title=The Business |url=https://archive.org/details/Sight_and_Sound_1993_12_BFI_GB/page/n5/mode |access-date=July 23, 2020 |magazine=Sight & Sound |publisher=British Film Institute |date=December 1993 |page=5}} The purchase allowed Nikkatsu to utilize Namco's computer graphics hardware for its films, while Namco was able to gain a foothold in the Japanese film industry.

File:PSX-Console-wController.jpg

In early 1994, Sony announced that it was developing its own video game console, the 32-bit PlayStation. The console began as a collaboration between Nintendo and Sony to create a CD-based peripheral for the Super Nintendo Entertainment System in 1988.{{cite web |last1=Lai |first1=Richard |title=We turned on the Nintendo PlayStation: It's real and it works |url=https://www.engadget.com/2015-11-06-nintendo-playstation-is-real-and-it-works.html |website=Engadget |access-date=December 5, 2020 |archive-url=https://web.archive.org/web/20201109021502/https://www.engadget.com/2015-11-06-nintendo-playstation-is-real-and-it-works.html |archive-date=November 9, 2020 |date=November 6, 2015}} Fearing that Sony would assume control of the entire project, Nintendo silently scrapped the add-on. Sony chose to refocus its efforts in designing the PlayStation in-house as its own console.

As it lacked the resources to produce its own games, Sony called for the support of third-party companies to develop PlayStation software. Namco, frustrated with Nintendo and Sega's licensing conditions for its consoles, agreed to support the PlayStation and became its first third-party developer.{{cite magazine|title= Pssstt! Wanna Buy a Game System? |magazine=Next Generation|issue=14 |publisher=Imagine Media |date=February 1996 |page=77}} The company began work on a conversion of Ridge Racer, its most-popular arcade game at the time.{{cite magazine|title=Namco Discuss the Making of Ridge Racer for the Sony PlayStation!|magazine=Electronic Gaming Monthly|issue=66 |publisher=Ziff Davis|date=January 1995|pages=170–171|url=https://archive.org/details/ElectronicGamingMonthly_201902/Electronic%20Gaming%20Monthly%20Issue%20066%20%28January%201995%29/page/n183/mode/2up}}

The PlayStation was released in Japan on December 3, 1994, with Ridge Racer as one of its first titles.{{cite web|url=http://www.mcvuk.com/news/read/the-day-our-world-changed/018627|archive-url=https://web.archive.org/web/20160205075331/http://www.mcvuk.com/news/read/the-day-our-world-changed/018627|url-status=live|title=The day our world changed|first=Dave|last=Roberts|website=MCV|date=September 29, 2005|access-date=April 15, 2015|archive-date=February 5, 2016}} Sony moved 100,000 units on launch day alone; publications attributed Ridge Racer to the PlayStation's early success, giving it an edge over its competitor, the Sega Saturn.{{cite magazine|title=Daytona USA|magazine=Edge|issue=21|volume=3|date=June 1995|pages=72–5}} cf. {{cite magazine|last=McNamara|first=Andy|url=http://www.gameinformer.com/sep95/rracer.html|title=Prepare Yourself for the Ultimate Racing Experience|magazine=Game Informer|date=September 1995|access-date=April 15, 2014|archive-url=https://web.archive.org/web/19971120013114/http://www.gameinformer.com/sep95/rracer.html|archive-date=November 20, 1997|url-status=dead|display-authors=etal}} cf. {{cite magazine|author=Air Hendrix|title=Pro Review: Daytona USA|magazine=GamePro|issue=73|volume=7|date=August 1995|page=50}} For a time, it was the best-selling PlayStation game in Japan.

Namcot was consolidated into Namco in 1995;{{cite web |last1=Romano |first1=Sal |title=Bandai Namco trademarks Namcot Collection in Japan, Mikage trademarks 99girls Bullseye |url=https://www.gematsu.com/2020/02/bandai-namco-trademarks-namcot-collection-in-japan-mikage-trademarks-99girls-bullseye |website=Gematsu |access-date=July 24, 2020 |archive-url=https://web.archive.org/web/20200319042353/https://www.gematsu.com/2020/02/bandai-namco-trademarks-namcot-collection-in-japan-mikage-trademarks-99girls-bullseye |archive-date=March 19, 2020 |date=February 3, 2020}} its final game was a PlayStation port of Tekken, published in March in Japan and in November worldwide.{{cite web |last1=Clements |first1=Ryan |title=The Evolution of Tekken |url=https://www.ign.com/articles/2009/09/19/the-evolution-of-tekken |website=IGN |access-date=January 5, 2021 |archive-url=https://web.archive.org/web/20201030090444/https://www.ign.com/articles/2009/09/19/the-evolution-of-tekken |archive-date=October 30, 2020 |date=September 18, 2009}} Tekken was designed for Namco's System 11 arcade system board, which was based on raw PlayStation hardware;{{cite magazine|title=Tekken|magazine=Edge|issue=21|volume=3|date=June 1995|pages=66–70}} this allowed the home version to be a near-perfect rendition of its arcade counterpart.{{cite book|last=Mott|first=Tony|title=1001 Video Games You Must Play Before You Die|year=2013|publisher=Universe Publishing|location=New York|isbn=978-0-7893-2090-2|title-link=1001 Video Games You Must Play Before You Die}} Tekken became the first PlayStation game to sell one million copies and played a vital role in the console's mainstream success.

Sony recognized Namco's commitment to the console, leading to Namco receiving special treatment from Sony and early promotional material adopting the tagline "PlayStation: Powered by Namco".{{cite book |last1=Manent |first1=Mathieu |title=PlayStation Anthology |date=February 1, 2018 |publisher=Geeks-Line |location=Paris |isbn=979-1-0937-5233-4 |pages=30–32}}{{cite magazine |title=So Who The Hell Is: Namco |magazine=Official UK PlayStation Magazine |issue=33 |publisher=Future Publishing |date=June 1999}} Namco was also given the rights to produce controllers, such as the NeGcon, which it designed with the knowledge it gained through developing its cancelled console. Though it had signed contracts to produce games for systems such as the Sega Saturn and 3DO Interactive Multiplayer, Namco concentrated its consumer software efforts on PlayStation for the remainder of the decade.{{cite magazine |title=Prescreen – Namco |url=https://archive.org/details/edgeuk015/page/n51/mode/2up |access-date=July 20, 2020 |magazine=Edge |issue=15 |publisher=Future Publishing |date=December 1994 |pages=50–53}}

As a means to draw players into its video arcades, Namco's arcade game division began releasing titles that featured unique and novel control styles and gameplay. In 1995, the company released Alpine Racer, an alpine skiing game that was awarded "Best New Equipment" during the year's Amusement and Music Operators Association (AMOA) exposition.{{cite web |last1=Alan Weiss |first1=Brett |title=Alpine Racer – Review |url=http://www.allgame.com/game.php?id=9488&tab=review |website=Allgame |access-date=December 27, 2019 |archive-url=https://web.archive.org/web/20141114113452/http://www.allgame.com/game.php?id=9488&tab=review |archive-date=November 14, 2014 |date=1998}}{{cite magazine|title=US Arcades Get Ready for War|magazine=Next Generation|issue=12|publisher=Imagine Media|date=December 1995|page=24}} Time Crisis, a lightgun shooter noteworthy for its pedal ducking mechanic,{{cite magazine |title=NG Alphas: Time Crisis |magazine=Next Generation|issue=27|publisher=Imagine Media |date=March 1997 |page=75}} helped set the standard for the genre as a whole,{{cite magazine|first1=Tom|last1=Guise |first2=Steve |last2=Key |title=Time Crisis |url=https://archive.org/stream/Computer_and_Video_Games_Issue_192_1997-11_EMAP_Images_GB#page/n71/mode/2up |access-date=December 16, 2020 |magazine=Computer and Video Games|issue=192|date=November 1997|pages=68–73}}{{cite magazine|title=Review Crew: Time Crisis |magazine=Electronic Gaming Monthly|issue=100|publisher=Ziff Davis |date=November 1997|page=202}}{{cite magazine|title=See the Light|magazine=Next Generation|issue=38|publisher=Imagine Media|date=February 1998|page=112}} while Prop Cycle gained notoriety for its usage of a bicycle controller the player pedaled.{{cite web |title=Prop Cycle |url=https://www.retrogamer.net/retro_games90/prop-cycle/ |website=Retro Gamer |date=October 17, 2014 |access-date=September 29, 2020 |archive-url=https://web.archive.org/web/20151101110934/https://www.retrogamer.net/retro_games90/prop-cycle/ |archive-date=November 1, 2015}}

The photo booth machine Star Audition, which offered players the chance of becoming a star in the show business, became a media sensation in Japan.{{cite web |last1=Tanikawa |first1=Miki |title=Where Stars Are Born: In The Arcade |url=https://www.bloomberg.com/news/articles/1997-12-21/where-stars-are-born-in-the-arcade-intl-edition |website=Bloomberg News |access-date=December 15, 2020 |date=December 21, 1997 |archive-date=March 8, 2021 |archive-url=https://archive.today/20210308212436/https://www.bloomberg.com/news/articles/1997-12-21/where-stars-are-born-in-the-arcade-intl-edition |url-status=live }} Namco Operations, which was renamed Namco Cybertainment in 1996, acquired the Edison Brothers Stores arcade chain in April.{{cite magazine|last=Webb |first=Marcus |title=Namco to Buy Edison Arcade Chain |magazine=Next Generation|issue=16|publisher=Imagine Media|date=April 1996|page=27}} Namco also introduced the Postpaid System, a centralized card payment system, as a means to combat the piracy of IC Cards in Japanese arcades.{{cite web |script-title=ja:ポストペイドシステムへ |trans-title=Post Paid System |url=http://www.namco.co.jp/nours/vol14/post/post.html |website=Namco WonderPage |access-date=December 15, 2020 |archive-url=https://web.archive.org/web/19970505204046/http://www.namco.co.jp/nours/vol14/post/post.html |archive-date=May 5, 1997 |language=ja |date=1996}}{{cite magazine |title=Namco Debuts "Postpaid System" |url=https://onitama.tv/gamemachine/pdf/19961115p.pdf |access-date=December 15, 2020 |magazine=Game Machine |issue=530 |publisher=Amusement Press |archive-url=https://web.archive.org/web/20200523232846/https://onitama.tv/gamemachine/pdf/19961115p.pdf |archive-date=May 23, 2020 |page=26 |language=ja}}

In September 1997, Namco announced it would begin development of games for the Nintendo 64, a console struggling to receive support from third-party developers.{{cite magazine |title=Namco Go Go! |url=https://archive.org/details/N64_Magazine_Issue_006_1997-09_Future_Publishing_GB/page/n13 |access-date=October 31, 2019 |magazine=N64 Magazine |issue=6 |publisher=Future Publishing |date=September 1997 |pages=14–15}} Namco signed a contract with Nintendo that allowed the company to produce two games for the console: Famista 64, a version of its Family Stadium series, and an untitled RPG for the 64DD peripheral. The RPG was never released while the 64DD went on to become a commercial failure.{{cite web |title=Everything About the 64DD |url=https://www.ign.com/articles/2001/02/10/everything-about-the-64dd |website=IGN |access-date=July 19, 2020 |archive-url=https://web.archive.org/web/20200614203845/https://www.ign.com/articles/2001/02/10/everything-about-the-64dd |archive-date=June 14, 2020 |date=February 9, 2001}} In October 1998, which one publication described as being "the most stunning alliance this industry has seen in a long while", Namco announced a partnership deal with long-time rival Sega to bring some of its titles to the newly unveiled Dreamcast.

As Namco primarily developed games for Sony hardware, and were among the biggest third-party developers for the PlayStation, the announcement surprised news outlets.{{cite web |title=Namco Turns to the Dark Side |url=https://www.ign.com/articles/1998/10/07/namco-turns-to-the-dark-side |website=IGN |access-date=July 18, 2020 |archive-url=https://web.archive.org/web/20200718232818/https://www.ign.com/articles/1998/10/07/namco-turns-to-the-dark-side |archive-date=July 18, 2020 |date=October 6, 1998}} For its PlayStation-based System 12 arcade board, Namco released the weapon-based fighting game Soul Edge a couple years back in 1996. Its 1999 Dreamcast sequel, which features multiple graphical enhancements and new game modes, is an early instance of a console game being better than its arcade version. Soulcalibur sold over one million units, won multiple awards, and contributed to the early success of the Dreamcast.{{cite magazine|title=Retroinspection: Dreamcast |author=McFerran, Damien |magazine=Retro Gamer |publisher=Imagine Publishing |issue=50 |pages=66–72 |url=http://www.nintendolife.com/news/2015/04/hardware_classics_sega_dreamcast |url-status=live |archive-url=https://web.archive.org/web/20160304110322/http://www.nintendolife.com/news/2015/04/hardware_classics_sega_dreamcast |archive-date=March 4, 2016 }}

Namco began experiencing decline in its consumer software sales by 1998 as a result of the Japanese recession, which affected the demand for video games as consumers had less time to play them. The company's arcade division had similar struggles, having slumped by 21% at the end of its fiscal year ending March 1998.{{cite web |title=Namco Annual Report 1998 |url=http://www.namco.co.jp/an/finance/pdf/annual/annual-1998.pdf |publisher=Namco |access-date=July 30, 2020 |archive-url=https://web.archive.org/web/20040719171223/http://www.namco.co.jp/an/finance/pdf/annual/annual-1998.pdf |archive-date=July 19, 2004 |date=March 1998}} Namco Cybertainment filed for Chapter 11 bankruptcy protection on January 29, 1998, citing reduced mall traffic, though they planned to close fewer than 50 of their 370 mall locations during the bankruptcy reorganization and even open new locations.{{cite magazine |first=Marcus |last=Webb |title=Despite Ch. 11, New Namco Arcades, Games, and LBEs Coming |magazine=Next Generation|issue=41 |publisher=Imagine Media |date=May 1998|page=33}}{{cite web |last1=Feldman |first1=Curt |title=Namco Arcades in Dire Straits |url=https://www.gamespot.com/articles/namco-arcades-in-dire-straits/1100-2462464/ |website=GameSpot |access-date=July 28, 2020 |archive-url=https://web.archive.org/web/20200728211821/https://www.gamespot.com/articles/namco-arcades-in-dire-straits/1100-2462464/ |archive-date=July 28, 2020 |date=April 28, 2000}} In its 1998 annual report, Namco reported a 26.3% drop in net sales, which it partly blamed on low consumer spending.

A further 55% drop was reported in November 1999 when its home console game output decreased.{{cite web |author1=Yukiyoshi Ike Sato |title=Latest Word On Namco |url=https://www.gamespot.com/articles/latest-word-on-namco/1100-2446817/ |website=GameSpot |access-date=January 20, 2021 |archive-url=https://web.archive.org/web/20201222162049/https://www.gamespot.com/articles/latest-word-on-namco/1100-2446817/ |archive-date=December 22, 2020 |date=November 10, 1999}} As a means to diversify itself from its arcade and consumer game markets, Namco entered the mobile phone game market with the Namco Station, a marketplace for i-Mode cellular devices that featured ports of its arcade games like Pac-Man and Galaxian.{{cite web |author1=Softbank |title=「パックマン」「ギャラクシアン」が携帯電話に登場！|trans-title="Pac-Man" and "Galaxian" are now available on mobile phones! |url=https://nlab.itmedia.co.jp/games/gsnews/0101/18/news14.html |website=Soft Bank News |access-date=September 22, 2019 |archive-url=https://web.archive.org/web/20190527211901/https://nlab.itmedia.co.jp/games/gsnews/0101/18/news14.html |archive-date=May 27, 2019 |date=January 18, 2001}} The company also majority-acquired Monolith Soft, an action role-playing game developer best known for creating the Xenosaga series.{{cite web|url=http://www.siliconera.com/2017/08/21/monolith-soft-executive-producer-going-namco-nintendo/|title=Monolith Soft Executive Producer On Going From Namco To Nintendo|author=Sato|website=Siliconera|date=August 21, 2017|access-date=September 28, 2017|archive-url=https://web.archive.org/web/20170821172136/http://www.siliconera.com/2017/08/21/monolith-soft-executive-producer-going-namco-nintendo/|archive-date=August 21, 2017|url-status=live}} It continued introducing novel concepts for arcades to help attract players, such as the Cyber Lead II, an arcade cabinet that features PlayStation and Dreamcast VMU memory card slots.{{cite web |last1=Ohbuchi |first1=Yutaka |title=AOU 2000: Namco |url=https://www.gamespot.com/articles/aou-2000-namco/1100-2541539/ |website=GameSpot |access-date=July 19, 2020 |archive-url=https://web.archive.org/web/20200719222541/https://www.gamespot.com/articles/star-wars-actor-alden-ehrenreich-would-like-to-mak/1100-6479785/ |archive-date=July 19, 2020 |date=April 26, 2000}}{{cite web |last1=Ike Sato |first1=Yukiyoshi |title=Namco Announces Cyber Read II |url=https://www.gamespot.com/articles/namco-announces-cyber-read-ii/1100-2446563/ |website=GameSpot |access-date=July 19, 2020 |archive-url=https://web.archive.org/web/20200719222157/https://www.gamespot.com/articles/namco-announces-cyber-read-ii/1100-2446563/ |archive-date=July 19, 2020 |date=February 14, 2000}}

File:Namco Osaka Nippombashi - panoramio.jpg

Namco's financial losses worsened in the 2000s.{{cite web |title=Namco Annual Report 2001 |url=http://www.namco.co.jp/an/finance/pdf/annual/annual-2001.pdf |publisher=Namco |access-date=July 19, 2020 |archive-url=https://web.archive.org/web/20040719172941/http://www.namco.co.jp/an/finance/pdf/annual/annual-2001.pdf |archive-date=July 19, 2004 |date=March 31, 2001}} In October 2000, the Japanese newspaper Nihon Keizai Shimbun reported that the company projected a loss of {{yen}}2.1 billion ($19.3M) for the fiscal year ending March 2001. Namco had previously hinted at this during an event with industry analysts, blaming its struggles on the depressed Japanese economy and dwindling arcade game market.{{cite web |last1=Gantayat |first1=Anoop |title=Namco Releases Financial Statement |url=https://www.ign.com/articles/2001/05/23/namco-releases-financial-statement |website=IGN |access-date=July 19, 2020 |archive-url=https://web.archive.org/web/20200719014645/https://www.ign.com/articles/2001/05/23/namco-releases-financial-statement |archive-date=July 19, 2020 |date=May 23, 2001}} The company closed its Wonder Eggs park on December 31, 2000,{{cite web |title=ナムコのワンダーエッグ3が12月31日で閉園 |url=https://nlab.itmedia.co.jp/games/gsnews/0012/04/news02.html |website=SoftBank News |access-date=July 19, 2020 |archive-url=https://web.archive.org/web/20200719173434/https://nlab.itmedia.co.jp/games/gsnews/0012/04/news02.html |archive-date=July 19, 2020 |language=ja |date=December 4, 2000}} which by that point saw an attendance number of six million visitors,{{cite web |last1=Hara |first1=Takehiko |title=「ナムコ・ワンダーエッグ3」が 通算入園者数600万人を突破 |trans-title="Namco Wonder Egg 3" surpasses 6 million visitors in total |url=https://nlab.itmedia.co.jp/games/news/9905/24/news03.html |website=SoftBank News |access-date=July 19, 2020 |archive-url=https://web.archive.org/web/20200719011604/https://nlab.itmedia.co.jp/games/news/9905/24/news03.html |archive-date=July 19, 2020 |language=ja |date=May 24, 1999}} in addition to shuttering many of its video arcades that returned substandard profits.{{cite book|last=Kent |first=Steven L. |author-link=Steven L. Kent |title=The Ultimate History of Video Games: The Story Behind the Craze that Touched our Lives and Changed the World |date=2002 |publisher=Random House International |location=New York |isbn=978-0-7615-3643-7 |pages=582}}

In February 2001, Namco updated its projections and reported it now expected a {{yen}}6.5 billion ($56.3M) net loss and a drop in revenue by 95% for the fiscal year ending March 2001, which severely impacted the company's release schedule and corporate structure.{{cite web |last1=Ahmed |first1=Shahed |title=Namco Expects Massive Losses |url=https://www.gamespot.com/articles/namco-expects-massive-losses/1100-2576388/ |website=GameSpot |access-date=January 20, 2021 |archive-url=https://web.archive.org/web/20210120075044/https://www.gamespot.com/articles/namco-expects-massive-losses/1100-2576388/ |archive-date=January 20, 2021 |date=May 24, 2000}}{{cite web |last1=Gantayat |first1=Anoop |title=Namco Incurs Losses |url=https://www.ign.com/articles/2001/03/01/namco-incurs-losses |website=IGN |access-date=July 19, 2020 |archive-url=https://web.archive.org/web/20200719020943/https://www.ign.com/articles/2001/03/01/namco-incurs-losses |archive-date=July 19, 2020 |date=February 28, 2001}} The company's earnings forecasts were lowered to accommodate its losses, its development strategy was reorganized to focus largely on established franchises, and 250 of its employees were laid off in what it described as "early retirement". Namco underwent restructuring to increase its income, which included the shuffling of its management and the announcement of production of games for Nintendo's GameCube and Microsoft's Xbox.{{cite web |title=Microsoft and Namco Team Up for Xbox Alliance |url=https://news.microsoft.com/2001/08/27/microsoft-and-namco-team-up-for-xbox-alliance/ |website=Microsoft |access-date=August 15, 2019 |archive-url=https://web.archive.org/web/20190815050814/https://news.microsoft.com/2001/08/27/microsoft-and-namco-team-up-for-xbox-alliance/ |archive-date=August 15, 2019 |date=August 27, 2001}}

Following its financial struggles, Namco's arcade division underwent mass reorganization. This division achieved strong success with Taiko no Tatsujin, a popular drum-based rhythm game where players hit a taiko drum controller to the beat of a song.{{cite web |title=Taiko No Tatsujin |url=https://www.ign.com/articles/2002/06/28/taiko-no-tatsujin |website=IGN |access-date=July 27, 2020 |archive-url=https://web.archive.org/web/20170314233822/https://www.ign.com/articles/2002/06/28/taiko-no-tatsujin |archive-date=March 14, 2017 |date=September 10, 2002}} Taiko no Tatsujin became a best-seller and created one of the company's most popular and prolific franchises.{{cite web |title=大ヒット「太鼓の達人」 ボツ寸前からの復活劇 |url=https://style.nikkei.com/article/DGXZZO50609510U9A001C1000000?channel=DF180320167079 |website=Nikkei Style |access-date=January 20, 2021 |archive-url=https://web.archive.org/web/20201017195208/https://style.nikkei.com/article/DGXZZO50609510U9A001C1000000?channel=DF180320167079 |archive-date=October 17, 2020 |language=ja |date=October 11, 2019}} Namco's North American divisions, in the meantime, underwent reorganization and restructuring as a result of decreasing profits.{{cite web |last1=Sulic |first1=Ivan |title=Namco Lay Offs |url=https://www.ign.com/articles/2002/09/10/namco-lay-offs |publisher=IGN |access-date=July 28, 2020 |archive-url=https://web.archive.org/web/20200629195421/https://www.ign.com/articles/2002/09/10/namco-lay-offs |archive-date=June 29, 2020 |date=September 10, 2002}}

Namco Hometek was stripped of its research and development divisions following Namco's disappointment in the quality of its releases.{{cite web |title=Namco Annual Report 2002 |url=http://www.namco.co.jp/an/finance/pdf/annual/annual-2002.pdf |publisher=Namco |access-date=July 19, 2020 |archive-url=https://web.archive.org/web/20040719182214/http://www.namco.co.jp/an/finance/pdf/annual/annual-2002.pdf |archive-date=July 19, 2004 |date=March 31, 2002}} Its continuing expansion into other non-video game divisions, including rehabilitation electronics and travel agency websites, prompted the creation of the Namco Incubation Center, which would control these businesses.{{cite web |last1=Tochen |first1=Dan |title=Pac-Man creator Toru Iwatani ponders his next step |url=https://www.gamespot.com/articles/pac-man-creator-toru-iwatani-ponders-his-next-step/1100-6092178/ |website=GameSpot |publisher=CBS Interactive |access-date=November 11, 2020 |archive-url=https://web.archive.org/web/20201111231232/https://www.gamespot.com/articles/pac-man-creator-toru-iwatani-ponders-his-next-step/1100-6092178/ |archive-date=November 11, 2020 |date=March 25, 2004}} The Incubation Center also hosted the Namco Digital Hollywood Game Laboratory game school, which designed the sleeper hit Katamari Damacy (2004).{{cite web |last1=Kidwell |first1=Emma |title=The uphill battle of getting Katamari Damacy noticed by Namco |url=https://www.gamedeveloper.com/design/the-uphill-battle-of-getting-i-katamari-damacy-i-noticed-by-namco |website=Gamasutra |access-date=November 11, 2020 |archive-url=https://web.archive.org/web/20201109031031/https://www.gamasutra.com/view/news/328861/The_uphill_battle_of_getting_Katamari_Damacy_noticed_by_Namco.php |archive-date=November 9, 2020 |url-status=live |date=October 17, 2018}}

Nakamura resigned as company president later in the year, being replaced with Kyushiro Takagi.{{cite web |last1=Niizumi |first1=Hirohiko |title=Namco gets new president |url=https://www.gamespot.com/articles/namco-gets-new-president/1100-6120370/ |website=GameSpot |archive-url=https://web.archive.org/web/20190824190710/https://www.gamespot.com/articles/namco-gets-new-president/1100-6120370/ |access-date=August 24, 2019 |archive-date=August 24, 2019 |date=March 14, 2005}} Anxious about the company's continuing financial struggles, Nakamura suggested that Namco begin looking into the possibility of merging with another company.{{cite web |author1=Masamune |title=VG人物：中村雅哉与他的Namco帝国 |trans-title=VG Persons: Masaya Nakamura and the Namco Empire |url=https://www.vgtime.com/topic/464557.jhtml?page=1 |website=VG Time |access-date=October 28, 2020 |archive-url=https://web.archive.org/web/20201028014144/https://www.vgtime.com/topic/464557.jhtml?page=1 |archive-date=October 28, 2020 |pages=1–3 |language=zh |date=February 22, 2017}} Namco first looked to Final Fantasy developer Square and Dragon Quest publisher Enix, offering to combine the three companies into one. Yoichi Wada, the president of Square, disliked Namco's financial showing and declined the offer. Square instead agreed to a business alliance with Namco. Following this, Namco then approached Sega, a company struggling to stay afloat after the commercial failure of the Dreamcast.

Sega's development teams and extensive catalog of properties caught Namco's interest, and believed a merge could allow the two to increase their competitiveness.{{cite web |last1=Rodriguez |first1=Steven |title=Namco and Sega Merger? |url=http://www.nintendoworldreport.com/news/8542/namco-and-|archive-url=https://web.archive.org/web/20170624202307/http://www.nintendoworldreport.com/news/8542/namco-and-sega-merger |website=Nintendo World Report |access-date=July 23, 2020|archive-date=June 24, 2017 |date=April 16, 2003}}{{cite web |last1=Varanini |first1=Giancarlo |title=Namco to merge with Sega? |url=https://www.gamespot.com/articles/namco-to-merge-with-sega/1100-6025217/ |website=GameSpot |access-date=July 23, 2020 |archive-url=https://web.archive.org/web/20200723015208/https://www.gamespot.com/articles/namco-to-merge-with-sega/1100-6025217/ |archive-date=July 23, 2020 |date=April 16, 2003}}{{cite news|url=http://usatoday30.usatoday.com/tech/techreviews/games/2001-01-23-dreamcast.htm |title=Dreamcast may be discontinued, Sega says |date=January 24, 2001 |newspaper=USA Today |archive-url=https://web.archive.org/web/20141225010445/http://usatoday30.usatoday.com/tech/techreviews/games/2001-01-23-dreamcast.htm |archive-date=December 25, 2014 |url-status=live |access-date=December 9, 2014 |agency=Associated Press}} Sega was already discussing a merge with pachinko manufacturer Sammy Corporation; executives at Sammy were infuriated at Sega's consideration of Namco's offer. A failed attempt to overturn the merge led Namco to withdraw its offer the same day Sega announced it turned down Sammy's. While Namco stated it was willing to negotiate with Sega on a future deal, Sega turned down the idea.{{Cite book|title=The Sega Arcade Revolution, A History in 62 Games|last=Horowitz|first=Ken|publisher=McFarland & Company|location=Jefferson, NC|year=2018|isbn=978-1-4766-3196-7 |pages=253–254}}

Shigeichi Ishimura, the son in-law of Nakamura, succeeded Takagi as Namco president on April 1, 2005; Nakamura retained his role as the company's executive chairman. This was part of Namco's continuing efforts at reorganizing itself to be in line with changing markets. On July 26, as part of its 50th anniversary event, Namco published NamCollection—a compilation of several of its PlayStation games—for the PlayStation 2 in Japan.{{cite web |title=Namco celebrates 50th birthday with compilation |url=https://www.gamespot.com/articles/namco-celebrates-50th-birthday-with-compilation/1100-6121031/ |website=GameSpot |access-date=October 11, 2019 |archive-url=https://web.archive.org/web/20140324005911/http://www.gamespot.com/articles/namco-celebrates-50th-birthday-with-compilation/1100-6121031/ |archive-date=March 24, 2014 |date=March 24, 2005}}

Namco also opened the Riraku no Mori, a companion to its Namja Town park that held massage parlors for visitors; Namco believed it would help make relaxation a source of entertainment.{{cite web |last1=Otake |first1=Tomoko |title=Taking it easy in the urban jungle |url=https://www.japantimes.co.jp/life/2005/07/17/to-be-sorted/taking-it-easy-in-the-urban-jungle/ |website=The Japan Times |access-date=July 27, 2020 |archive-url=https://web.archive.org/web/20190108014916/https://www.japantimes.co.jp/life/2005/07/17/to-be-sorted/taking-it-easy-in-the-urban-jungle/ |archive-date=January 8, 2019 |date=July 17, 2005}} The Idolmaster, a rhythm game that incorporated elements of life simulations, was widely successful in Japan and resulted in the creation of a multi-million-grossing franchise.{{cite web |last1=Loo |first1=Egan |title=Top-Selling Media Franchises in Japan: 2015 |url=https://www.animenewsnetwork.com/news/2015-12-29/top-selling-media-franchises-in-japan-2015/.97051 |website=Anime News Network |access-date=July 27, 2020 |archive-url=https://web.archive.org/web/20200707025723/https://www.animenewsnetwork.com/news/2015-12-29/top-selling-media-franchises-in-japan-2015/.97051 |archive-date=July 7, 2020 |date=December 29, 2015}}

In early 2005, Namco began merger talks with Bandai, a toy and anime company.{{cite web |title=すべては1カ月で決まった バンダイとナムコの統合 |trans-title=Bandai and Namco integration all decided in one month |url=https://style.nikkei.com/article/DGXZZO51130700Y9A011C1000000/ |website=Nikkei Style |access-date=October 15, 2020 |archive-url=https://web.archive.org/web/20200109203418/https://style.nikkei.com/article/DGXZZO51130700Y9A011C1000000/?page=2 |archive-date=January 9, 2020 |pages=1–2 |language=ja |date=October 22, 2018 |url-status=live }} The two discussed a year prior about a possible business alliance after Namco collaborated with Bandai subsidiary Banpresto to create an arcade game based on Mobile Suit Gundam. Bandai showed interest in Namco's game development skills and believed combining this with its wide library of profitable characters and franchises, such as Sailor Moon and Tamagotchi, could increase their competitiveness in the industry.{{cite web |last1=Kobayashi |first1=Shinya |title=きっかけは「一年戦争」──ナムコ・バンダイの進化論 |trans-title=The trigger was "One Year War" ── Namco Bandai's theory of evolution |url=https://www.itmedia.co.jp/news/articles/0505/02/news047.html |website=ITMedia |access-date=October 15, 2020 |archive-url=https://web.archive.org/web/20190129073515/http://www.itmedia.co.jp/news/articles/0505/02/news047.html |archive-date=January 29, 2019 |language=ja |date=May 2, 2005 |url-status=live }}

Nakamura and Namco's content development division advisors pushed against the idea, as they felt Bandai's corporate model would not blend well with Namco's more agricultural work environment. Namco's advisors were also critical of Bandai for focusing on promotion and marketing over quality. As Namco's financial state continued to deteriorate, Ishimura pressured Nakamura into supporting the merger. Bandai's offer was accepted on May 2, with both companies stating in a joint statement their financial difficulties were the reason for the merger.{{cite web |last1=Feldman |first1=Curt |title=Bandai, Namco to merge |url=https://www.gamespot.com/articles/bandai-namco-to-merge/1100-6123385/ |website=GameSpot |access-date=August 25, 2019 |archive-url=https://web.archive.org/web/20190406041415/https://www.gamespot.com/articles/bandai-namco-to-merge/1100-6123385/ |archive-date=April 6, 2019 |date=December 13, 2005}}{{cite web |last1=Carless |first1=Simon |title=Namco, Bandai To Merge |url=https://www.gamedeveloper.com/game-platforms/namco-bandai-to-merge |website=Gamasutra |access-date=August 25, 2019 |archive-url=https://web.archive.org/web/20190402154647/http://www.gamasutra.com/view/news/96365/Namco_Bandai_To_Merge.php |archive-date=April 2, 2019 |url-status=live |date=May 2, 2005}}

The business takeover, where Bandai acquired Namco for {{yen}}175.3 billion ($1.7B), was finalized on September 29. An entertainment conglomerate named Namco Bandai Holdings was established the same day; while their executive departments merged, Bandai and Namco became independently-operating subsidiaries of the new umbrella holding company.{{cite web |title=Namco 2005 Annual Report |url=http://www.bandainamco.co.jp/ir/annual/pdf_namco/05_annual.pdf |website=Bandai Namco |access-date=August 29, 2020 |archive-url=https://web.archive.org/web/20060117094051/http://www.bandainamco.co.jp/ir/annual/pdf_namco/05_annual.pdf |archive-date=January 17, 2006 |location=Japan |date=March 31, 2005 |url-status=live }}{{cite web |title=Namco, Bandai announce merger to gain edge |url=https://www.ampress.co.jp/english_news.htm |website=Game Machine |access-date=November 17, 2020 |archive-url=https://web.archive.org/web/20190910080610/http://www.ampress.co.jp/english_news.htm |archive-date=September 10, 2019 |language=ja |date=May 2005}} Kyushiro Takagi, Namco's vice chairman, was appointed chairman and director of Namco Bandai Holdings. The combined revenues of the new company were estimated to be {{yen}}458 billion ($4.34B), making Namco Bandai the third-largest Japanese game company after Nintendo and Sega Sammy Holdings.{{cite news| url=https://www.forbes.com/feeds/afx/2005/05/02/afx1990362.html | work=Forbes | title=Bandai, Namco to merge in Sept to form Japan's No 3 toy, game group – UPDATE 2 |date=February 5, 2005 |archive-url=https://web.archive.org/web/20110814014400/http://www.forbes.com/feeds/afx/2005/05/02/afx1990362.html |access-date=September 18, 2007|archive-date=August 14, 2011}}

As its parent company was preparing for a full business integration, Namco continued its normal operations, such as releasing Ridge Racer 6 as a launch title for the newly-unveiled Xbox 360 in October and collaborating with Nintendo to produce the arcade game Mario Kart Arcade GP.{{cite web |last1=Brotherson |first1=Corey |title=Ridge Racer 6 online details |url=https://www.eurogamer.net/articles/news_050805_RR6online |website=Eurogamer |access-date=July 27, 2020 |archive-url=https://web.archive.org/web/20200727040653/https://www.eurogamer.net/articles/news_050805_RR6online |archive-date=July 27, 2020 |date=August 5, 2005}}{{cite web |last1=Gantayat |first1=Anoop |title=JAMMA 2005: Hands On with Mario Kart |url=https://www.ign.com/articles/2005/09/01/jamma-2005-hands-on-with-mario-kart |website=IGN |access-date=December 14, 2020 |archive-url=https://web.archive.org/web/20200507004630/https://www.ign.com/articles/2005/09/01/jamma-2005-hands-on-with-mario-kart |archive-date=May 7, 2020 |date=September 1, 2005}} The company honored the 25th anniversary of its Pac-Man series with Pac-Pix, a puzzle game for the Nintendo DS,{{cite web |last1=Slagle |first1=Matt |title=Pac-Man going strongafter 25 years in a maze |url=https://www.nytimes.com/2005/06/17/technology/pacman-going-strongafter-25-years-in-a-maze.html |website=The New York Times |access-date=July 27, 2020 |archive-url=https://web.archive.org/web/20200630093041/https://www.nytimes.com/2005/06/17/technology/pacman-going-strongafter-25-years-in-a-maze.html |archive-date=June 30, 2020 |date=June 17, 2005}} and entered the massively multiplayer online game market with Tales of Eternia Online, an action role-playing game based on its Tales franchise.{{cite web |title=More details on Tales of Eternia Online |url=https://www.gamespot.com/articles/more-details-on-tales-of-eternia-online/1100-6111034/ |website=GameSpot |access-date=July 27, 2020 |archive-url=https://web.archive.org/web/20200727031613/https://www.gamespot.com/articles/hero-shooter-rogue-company-is-out-now-in-early-acc/1100-6479931/ |archive-date=July 27, 2020 |date=October 20, 2004}}{{cite web |last1=Niizumi |first1=Hirohiko |title=Tales of Eternia Online beta begins |url=https://www.gamespot.com/articles/tales-of-eternia-online-beta-begins/1100-6130509/ |website=GameSpot |access-date=July 27, 2020 |archive-url=https://web.archive.org/web/20200727031715/https://www.gamespot.com/articles/tales-of-eternia-online-beta-begins/1100-6130509/ |archive-date=July 27, 2020 |date=August 8, 2005}}

File:NBGI_Headquarters.JPG) headquarters in Shinagawa, Tokyo|alt=Namco Bandai Games headquarters]]

On January 4, 2006, Namco Hometek was merged with Bandai Games—Bandai America's consumer game division—to create Namco Bandai Games America, absorbing Namco America's subsidiaries and completing Namco and Bandai's merge in North America.{{cite web |last1=Saeki |first1=Kenji |title=バンダイナムコグループ、ゲーム部門は2006年4月に 株式会社バンダイナムコゲームスを設立し統合 |trans-title=Bandai Namco Group and Game Division established and integrated Bandai Namco Games Co., Ltd. in April 2006. |url=https://game.watch.impress.co.jp/docs/20050913/bn.htm |website=Game Watch |access-date=October 15, 2020 |archive-url=https://web.archive.org/web/20170808100833/https://game.watch.impress.co.jp/docs/20050913/bn.htm |archive-date=August 8, 2017 |language=ja |date=September 13, 2005 |url-status=live }}{{cite web |last1=Adams |first1=David |title=Namco, Bandai Complete North American Merger |url=https://www.ign.com/articles/2006/01/04/namco-bandai-complete-north-american-merger |website=IGN |access-date=May 18, 2020 |archive-url=https://web.archive.org/web/20190823232620/https://www.ign.com/articles/2006/01/04/namco-bandai-complete-north-american-merger |archive-date=August 23, 2019 |date=January 4, 2006}} Namco's console game, business program, mobile phone, and research facility divisions were merged with Bandai's console division to create a new company, Namco Bandai Games, on March 31, as Namco was effectively dissolved.{{cite press release |author= |title=Reorganization of the Japanese Operations of the Namco Bandai Group |url= https://www.bandainamco.co.jp/en/releases/images/3/26785.pdf |location=Tokyo |publisher=Bandai Namco Group |date=January 11, 2006 |access-date=2023-03-18}}{{cite web |last1=Niizumi |first1=Hirohiko |title=Bandai and Namco outline postmerger strategy |url=https://www.gamespot.com/articles/bandai-and-namco-outline-postmerger-strategy/1100-6133113/ |website=GameSpot |access-date=July 27, 2020 |archive-url=https://web.archive.org/web/20200724231428/https://www.gamespot.com/articles/bandai-and-namco-outline-postmerger-strategy/1100-6133113/ |archive-date=July 24, 2020 |date=September 13, 2005}}{{cite web |last1=Gantayat |first1=Anoop |title=Bandai Namco Games Opens Doors in March |url=https://www.ign.com/articles/2006/01/11/bandai-namco-games-opens-doors-in-march |website=IGN |access-date=October 13, 2020 |archive-url=https://web.archive.org/web/20201013174608/https://www.ign.com/articles/2006/01/11/bandai-namco-games-opens-doors-in-march |archive-date=October 13, 2020 |date=January 11, 2006}}{{cite web |title=ニユースダイジェスト |url=http://www.ampress.co.jp/backnumber/bn2006.01.15.htm |website=Game Machine |access-date=October 20, 2020 |archive-url=https://web.archive.org/web/20170206041540/http://www.ampress.co.jp/backnumber/bn2006.01.15.htm |archive-date=February 6, 2017 |language=ja |date=January 12, 2006}}

The Namco name was repurposed for a new Namco Bandai subsidiary the same day, which absorbed its predecessor's amusement facility and theme park operations.{{cite web |last1=Karlin |first1=David |title=Bandai and Namco Finalize Merger Details |url=http://www.1up.com/news/bandai-namco-finalize-merger-details |website=1UP.com |access-date=July 27, 2020 |archive-url=https://web.archive.org/web/20140312025357/http://www.1up.com/news/bandai-namco-finalize-merger-details |archive-date=March 12, 2014 |date=January 11, 2006}} Namco's European division was folded into Namco Bandai Networks Europe on January 1, 2007, as it was reorganized into the company's mobile game and website division.{{cite web |author1=GamesIndustry International |title=Namco Bandai Strengthens Its European Mobile Business with the Formation Of Namco Bandai Networks Ltd |url=https://www.gamesindustry.biz/articles/namco-bandai-strengthens-its-european-mobile-business-with-the-formation-of-namco-bandai-networks-europe-ltd |website=Gamesindustry.biz |access-date=July 27, 2020 |archive-url=https://web.archive.org/web/20200727032217/https://www.gamesindustry.biz/articles/namco-bandai-strengthens-its-european-mobile-business-with-the-formation-of-namco-bandai-networks-europe-ltd |archive-date=July 27, 2020 |date=November 10, 2006}} Until April 2014, Namco Bandai Games used the Namco logo on its games to represent the brand's legacy.{{cite web |title=「バンダイナムコゲームス」にレーベル統一 ゲームから「バンダイ」「ナムコ」「バンプレスト」消滅 |trans-title="Bandai", "Namco", "Banpresto" disappeared, game label unified as "Bandai Namco Games" |url=https://www.itmedia.co.jp/news/articles/1402/05/news124.html |website=ITmedia |access-date=August 2, 2020 |archive-url=https://web.archive.org/web/20160818075757/https://www.itmedia.co.jp/news/articles/1402/05/news124.html |archive-date=August 18, 2016 |language=ja |date=February 5, 2014}}

The Namco Cybertainment division was renamed Namco Entertainment in January 2012, and to Namco USA in 2015. A division of Bandai Namco Holdings USA, Namco USA worked with chains such as AMC Theatres to host its video arcades in their respective locations.{{cite web |title=Examples |url=http://www.namcoentertainment.com/examples |website=Namco USA |access-date=April 14, 2021 |archive-url=https://web.archive.org/web/20180625095947/http://www.namcoentertainment.com/examples |archive-date=June 25, 2018}} The second Namco company was renamed Bandai Namco Amusement on April 1, 2018 following a corporate restructuring by its parent. Amusement took over the arcade game development branch of Bandai Namco Games, which renamed itself to Bandai Namco Entertainment in 2015.{{cite magazine |title=最先端技術によるキッズ向け冒険施設"屋内冒険の島 ドコドコ"、立川高島屋S.C.に10月11日よりオープン！ |trans-title=The state-of-the-art adventure facility for kids "Indoor Adventure Island Dokodoko" will open in Tachikawa Takashimaya S.C. from October 11th!|url=https://www.famitsu.com/news/201808/08162095.html |magazine=Famitsu |access-date=August 25, 2019 |archive-url=https://web.archive.org/web/20190509042408/https://www.famitsu.com/news/201808/08162095.html |archive-date=May 9, 2019 |date=August 8, 2018}}{{cite web |title=バンダイナムコアミューズメント，イギリスの玩具店「Hamleys」のFC展開を年内に実施予定 |trans-title=BANDAI NAMCO Amusement plans to launch FC of British toy store "Hamleys" by the end of this year |url=https://www.4gamer.net/games/999/G999905/20180525138/ |website=4Gamer.net |archive-url=https://web.archive.org/web/20200804080443/https://www.4gamer.net/games/999/G999905/20180525138/ |archive-date=August 4, 2020|access-date=August 25, 2019 |date=May 25, 2018}}

Namco USA was absorbed into Bandai Namco Amusement's North American branch in 2021 following its parent company's decision to exit the arcade management industry in the United States.{{cite web |last1=Stenbuck |first1=Kite |title=Bandai Namco Will No Longer Handle Amusement Facilities in America |url=https://www.siliconera.com/bandai-namco-will-no-longer-handle-amusement-facilities-in-america/ |website=Siliconera |access-date=April 2, 2021 |archive-url=https://web.archive.org/web/20210301153907/https://www.siliconera.com/bandai-namco-will-no-longer-handle-amusement-facilities-in-america/ |archive-date=March 1, 2021 |date=March 1, 2021}} This makes Namco Enterprises Asia and Namco Funscape―Bandai Namco's arcade division in Europe―the last companies to use the original Namco trademark in their names.{{cite web |title=Main Group Companies |url=https://www.bandainamco.co.jp/en/about/grouplink.html |publisher=Bandai Namco Entertainment |access-date=August 25, 2019 |archive-url=https://web.archive.org/web/20190627093824/https://www.bandainamco.co.jp/en/about/grouplink.html |archive-date=June 27, 2019}} Bandai Namco Holdings and its subsidiaries continue to use the Namco name for a variety of products, including mobile phone applications, streaming programs,{{cite web |title=情報配信スタジオ"ナムコハイシーンスタジオ"がオープン |trans-title=Information distribution studio "Namco High Scene Studio" opens |url=https://dengekionline.com/articles/43783/ |website=Dengeki |access-date=July 27, 2020 |archive-url=https://web.archive.org/web/20200719085931/https://dengekionline.com/articles/43783/ |archive-date=July 19, 2020 |language=ja |date=July 19, 2020}} and eSports-focused arcade centers in Japan.{{cite web |last1=Wong |first1=Alistar |title=Bandai Namco To Open New eSports-Focused Arcade in Ikebukuro, Tokyo |url=https://www.siliconera.com/bandai-namco-to-open-new-esports-focused-arcade-in-ikebukuro-tokyo/ |website=Siliconera |access-date=July 27, 2020 |archive-url=https://web.archive.org/web/20200116045246/https://www.siliconera.com/bandai-namco-to-open-new-esports-focused-arcade-in-ikebukuro-tokyo/ |archive-date=January 16, 2020 |date=December 22, 2019}}

Namco was one of the world's largest producers of video arcade games, having published over 300 titles since 1978.{{cite web |title=Namco – Coin-Operated Machines |url=https://www.arcade-museum.com/manuf_detail.php?manuf_id=1522&orig_game_id=8827 |website=Killer List of Videogames |access-date=November 15, 2020 |archive-url=https://web.archive.org/web/20201115144425/https://www.arcade-museum.com/manuf_detail.php?manuf_id=1522&orig_game_id=8827 |archive-date=November 15, 2020}} Many of its games are considered some of the greatest of all time, including Pac-Man,{{cite journal|title=The Top 100 Video Games|journal=Flux|date=April 1995|issue=4}}{{cite web|title=The Greatest Games of All Time|url=http://www.gamespot.com/gamespot/features/all/greatestgames/index.html|website=GameSpot |access-date=May 9, 2020 |archive-url=https://web.archive.org/web/20080726155641/http://www.gamespot.com/gamespot/features/all/greatestgames/index.html|archive-date=July 26, 2008|date=2007}} Galaga,{{cite web |last1=Semrad |first1=Steve |title=The Greatest 200 Videogames of Their Time |url=http://www.1up.com/features/egm-200-greatest-videogames?pager.offset=8 |website=1UP.com |access-date=July 14, 2019 |archive-url=https://web.archive.org/web/20121020122027/http://www.1up.com/features/egm-200-greatest-videogames?pager.offset=8 |archive-date=October 20, 2012 |page=9 |date=February 2, 2006}} Xevious,{{cite book |title=Reader's Choice of Best Game |publisher=Gamest |location=Tokyo |isbn=978-4-8819-9429-0 |page=48}} Ridge Racer,{{cite web|title=100 Greatest Retro Games part 1|url=http://www.nowgamer.com/100-greatest-retro-games-part-1/|website=NowGamer |archive-url=https://web.archive.org/web/20190502004527/http://www.nowgamer.com/100-greatest-retro-games-part-1/ |archive-date=May 2, 2019|access-date=January 1, 2016|date=March 31, 2010}} Tekken 3,{{cite web |url=http://www.gamesradar.com/best-games-ever/ |title=The 100 Best Games of All-Time |date=February 25, 2015 |website=GamesRadar+ |access-date=November 19, 2013 |archive-url=https://web.archive.org/web/20150319223433/http://www.gamesradar.com/best-games-ever/ |archive-date=March 19, 2015 |url-status=live }} and Katamari Damacy.{{cite web |url=http://www.gamesradar.com/the-100-best-games-of-all-time/ |title=The 100 best games of all time |date=April 1, 2011 |website=GamesRadar+ |access-date=March 7, 2019 |url-status=dead |archive-url=https://web.archive.org/web/20120118151554/http://www.gamesradar.com/the-100-best-games-of-all-time/ |archive-date=January 18, 2012 }}{{cite magazine|title=All-TIME 100 Video Games|url=https://techland.time.com/2012/11/15/all-time-100-video-games/|magazine=Time|access-date=October 28, 2017|date=November 15, 2012|url-status=live|archive-url=https://web.archive.org/web/20160307075016/http://techland.time.com/2012/11/15/all-time-100-video-games/|archive-date=March 7, 2016}}

Pac-Man is considered one of the most important video games ever made, having helped encourage originality and creative thinking within the industry. Namco was recognized for the game's worldwide success in 2005 by Guinness World Records;{{cite web |title=Most successful coin-operated arcade game |url=https://www.guinnessworldrecords.com/world-records/most-successful-coin-operated-arcade-game |website=Guinness World Records |access-date=July 31, 2020 |archive-url=https://web.archive.org/web/20150303130410/https://www.guinnessworldrecords.com/world-records/most-successful-coin-operated-arcade-game |archive-date=March 3, 2015}} by that timeframe, Pac-Man sold over 300,000 arcade units and grossed over $1 billion in quarters globally. In an obituary for Masaya Nakamura in 2017, Nintendo Life{{'}}s Damien McFerran wrote: "without Namco and Pac-Man, the video game arena would be very different today."

Namco's corporate philosophy and innovation have received recognition from publications. In a 1994 retrospective on the company, a writer for Edge described Namco as being "among the true pioneers of the coin-op business", a developer with a catalog of well-received and historically significant titles. The writer believed that Namco's success lay in its forward-thinking and firmness on quality, which they argued made it stand out from other developers. A staff member of Edge{{'}}s sister publication, Next Generation, wrote in 1998: "In a world where today's stars almost always become tomorrow's has-beens, Namco has produced consistently excellent games throughout most of its history." The writer credited the company's connections with its players and its influential releases, namely Pac-Man, Xevious, and Winning Run, as the keys to its success in a rapidly changing industry.{{cite magazine |title=NG Alphas – The Secret Of Namco's Success |magazine=Next Generation |issue=47 |publisher=Imagine Media |date=November 1998 |pages=27–31}}

Publications and industry journalists have identified Namco's importance to the industry. Hirokazu Hamamura, chief editor of Famitsu, credited the company's quality releases to the rise in popularity of video game consoles, and, in turn, the entirety of Japan's video game industry.{{cite news |last1=Warnock |first1=Eleanor |title=Japanese Executive Turned Pac-Man into Massive Hit |work=The Wall Street Journal |publisher=Dow Jones & Company |date=February 4, 2017}} Writers for Ultimate Future Games and Official UK PlayStation Magazine have credited the company and its games to the early success of the PlayStation, one of the most iconic entertainment brands worldwide. In addition, Official UK PlayStation Magazine wrote that Namco serves as "the godfather of game developers", and one of the most important video game developers in history.

Staff for IGN in 1997 claimed that Namco represents the industry as a whole, with titles like Pac-Man and Galaga being associated with and representing video games. They wrote: "Tracing the history of Namco is like tracing the history of the industry itself. From its humble beginnings on the roof of a Yokohama department store, to the impending release of Tekken 3 for the PlayStation, Namco has always stayed ahead of the pack."{{cite web |title=Namco: A Brief History Through Time |url=https://www.ign.com/articles/1997/11/18/namco-a-brief-history-through-time |website=IGN |access-date=July 16, 2020 |archive-url=https://web.archive.org/web/20200716191734/https://www.ign.com/articles/1997/11/18/namco-a-brief-history-through-time |archive-date=July 16, 2020 |date=November 17, 1997}} In 2012, IGN listed Namco among the greatest video game companies of all time, writing that many of its games—including Galaga, Pac-Man, Dig Dug, and Ridge Racer—were of consistent quality and helped define the industry as a whole.{{cite web |title=Namco – #21 Top Video Game Makers |url=https://www.ign.com/lists/video-game-makers/21 |website=IGN |date=2012 |access-date=July 2, 2020 |archive-url=https://web.archive.org/web/20190921021920/https://www.ign.com/lists/video-game-makers/21 |archive-date=September 21, 2019}}

{{Portal|Japan|Companies|Video games}}

• List of Namco games
• Namcot Collection

{{Notelist}}

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• [http://www.namco.com/map.php Official website] {{Webarchive|url=https://web.archive.org/web/20060320020613/http://www.namco.com/map.php |date=March 20, 2006 }}
• {{url|web.archive.org/web/20060202023936/https://www.namco.co.jp/|Namco WonderPage}}

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Category:1955 establishments in Japan

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