Its truth that porn is a driving force beneath the spread of all media, going back as far as we've had any kind of media at all. Ancient Rome and Greece had a taste for it (in jest or not), which is why over so many years, the self righteous catholic church made a thing of seeking out, destroying/defacing and removing anything that was ancient and perceived pornographic. The Vatican has the largest collection of old porn anywhere, because it would make public eyes bleed, apparently. No matter how it may be perceived, that's a lot of culture they are holding hostage.
Anyway, this demo while a bit 'on the j-perv side', is the only one to I've seen to show any kind of character interactivity beyond the usual Star Citizen and Valkyrie space ship demos we've seen. I'd like to imagine what could be done with some good writing and a better scenario, characters and world. Makes me really excited to imagine what the likes of Bioware or Telltale could do with this tech.
An exciting thought.
As for japan's dwindling population and messy work culture, this stuff could be solved by japan using immigration to fill the falling birth rate. Trouble is they are so in fear of losing their cultural identity (definitely a misplaced fear, IMO, as Hong Kong, Hawaii, Singapore are examples that you can integrate with other people, and still keep your culture and ways), that its as if they'd rather all die out, than let foreigners pick up their slack. I think its been a government led agenda to keep foreigners at bay, because they lost in WWII. A pity, because it may yet bury them as a nation, if they don't swallow some of that pride and wise up.