Theory: Magic mushrooms were to KIKIYAMA what alcohol was to ZUN.
I understand why this seems like such a wild theory to most people. I think I downloaded it back in 2006 or 2007 to see what the Uboa stuff was about, but I put it aside until recently at least, when I got into psychedelic drugs beyond just pot. If you haven't tried the stronger psychedelics (mushrooms, LSD primarily), then there is probably not going to be any way you will have any insight into this. I am glad Madotsuki-chan stayed a fixture on /jp/ through the reactionfaces, or else I might not have been reminded of the game.
I should preface this by saying I'm a responsible drug user, and it's about intellectual and personal pursuits for me. We are talking, like, Aldous Huxley drug use, not Charlie Sheen drug use. When I started using psilocybin, more commonly known as magic mushrooms, it very immediately became clear to me that this game was inspired by drugs. Not only that, but the biggest shocker I've discovered yet is that the game seems to be intuitive while under the influence of strong psychedelic drugs in a way that it is not when played in an ordinary state of consciousness. By intuitive, I mean, I seem to be able to figure out where to go and how to interact with the game world with the same sort of reasoning process that the game's creator had, or at least the process that he expected players to have. When I played the game without drugs circa 2007, I had no idea where to go and generally felt completely lost in the game world, and often bored. Now I feel very differently.
It seems clear to me that KIKIYAMA was influenced by either psilocybin (mushrooms), LSD, or both, and possibly other psychedelics as well. The kind of primal, archaic art style found in much of the game, is one that is commonly associated with the psychedelic experience.
Now, it's easy to just write the theory off, especially if you have never done drugs. But if you have done them, you may agree with me that the imagery in the game is so strongly representative of the kind of primal, archaic sights of the psychedelic experience that there is no question that this was their inspiration.
Magic mushrooms were not always illegal in Japan. They were only criminalized in 2002 due to the World Cup 2002 (soccer) being held in Japan that year [1]. They were common enough that you could buy them from vending machines near love hotels, and they were extremely cheap. Apparently everyone was eating them, even bored housewives [2]. So I think it's reasonable to believe that an indie game developer would have used them as well.
So, where does this theory leave us? Well, there are two theories I have to offer, and that was the first – that Yume Nikki was inspired by psychedelic drugs.
The second theory is that being in a psychedelic state yourself is the 'native state' to be able to play the game in. In other words, you will likely be playing the game not only as it was intended to be played, but also the way it was created. If psychedelic drugs are something you think is for you, and you are at liberty to safely use them, I think that you should try experiencing the game 'natively'. The difference may shock you.
If you have hang-ups about psychedelic drugs, I can offer you the following: KIKIYAMA probably used them. Steve Jobs dropped acid. Aldous Huxley used peyote and LSD. Shigeru Miyamoto (creator of Super Mario Bros) took LSD. Too many mainstream, respected figures to name have used psychedelics, so if you feel they are for degenerates, that notion does not match up with the facts. That many actual degenerates and other unfortunate souls use them does not change what they are, and we tend to have an ingrained mindset about drugs here in Western civilization.
[1]
http://kotaku.com/5912573/japanese-vending-machines-selling-you-hallucinogenic-herb-for-sexy-good-times[2]
http://www.stippy.com/only-in-japan/when-magic-mushrooms-were-legal-in-japan/