Despite the Pac-Man machines, I put the ad at around ’86 or ’87, when acid wash/stone wash and zippers hit it big with the sort of yuppies-in-training who wore Jordache.
The arcade background is curious, at first glance. Pac-Man (1980) and Ms. Pac-Man (1981) were old news by this time, and the rich kids hung out at arcades only to be seen by other rich kids. They didn’t want to get their hands dirty playing the games, and when they did stoop to put in a quarter, some arcade rat would smack his coin into the corner of the marquee and talk smack until the screen said `Game Over’.
Ultimately, the ad defines the arcade environment as a social advancement opportunity instead of a place of amusement and competition, and to this end it features a video game Jordache’s non-gaming clients would recognize. That game was, and still is, Pac-Man.
Miller’s Outpost would virtually abandon designer jeans shortly after this to concentrate on its home brand, Anchor Blue, and Levi’s.
(Image via The Man in the Gray Flannel Suit)
2 Warps to Neptune 
I had completely forgotten about Miller’s Outpost until you mentioned it here.
They had that huge wall of Levi’s, and some of them had a moving ladder so the employees could climb up to reach the smaller sizes.