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Nintendo Patents Video Game Insanity  

U.S. Patent No. 6,935,954:
A video game and game system incorporating a game character's sanity level that is affected by occurrences in the game such as encountering a game creature or gruesome situation. A character's sanity level is modified by an amount determined based on a character reaction to the occurrence such as taking a rest or slowing game progress and/or an amount of character preparation. . . . As the character's sanity level decreases, game play is effected such as by controlling game effects, audio effects, creating hallucinations and the like. . . .
More: Slashdot.
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