VIDEO GAMES have been given a bad rap. It is said that they induce youngsters to waste time, ruin their eyesight and become aggressive and violent. Arcades are about as popular with parents as pool halls in River City. Even the surgeon general has warned that the Pac-Man generation runs the risk of long-range mental health problems.

But at the other end of the age spectrum, there's better news. Nursing homes in the Midwest have been experimenting with video games for the residents and have had some surprising and gratifying success stories. It seems that old-timers like the games just as much as the kids, and are suffering no ill effects at all. Instead, there have been some significant benefits.

The electronic attractions get people out of their rooms and into a social situation. Playing the games in a common room is not a passive activity like watching television. It requires active involvement and encourages even the bystanders to cheer and groan. The fast-moving, blinking lights, the multi-colored blips and graphics and the often annoying beeps create excitement and stimulation that an adolescent may not need. But octogenarians are thriving. Nursing home residents who were withdrawn or depressed are drawn by the action of the games. Others are rejuvenated by the competition. And, as any parent who has tried to beat a 12-year-old at Space Invaders knows, these games build spectacular hand-eye coordination.

It's wonderful to discover that the games, which have come to be regarded by most middle-aged Americans as a quarter-guzzling, time-wasting nuisance, turn out to be a boon to the senior set. It's like learning that mold can be turned into penicillin. You may not want to go so far as to buy Frogger for father or Missile Command for mom. But it's nice to know that for some lonely and lethargic nursing home residents, the games are therapeutic, challenging and just plain fun.