Legend has it that the decision to kill off Aerith in Final Fantasy VII, as well as its centering around themes of death and rebirth, was inspired by the death of Hironobu Sakaguchi's mother. While this isn't true, his feelings that death shouldn't be portrayed as clinical and sterile and 'laudable', that it should be shown as sudden, brutal, and tragic, did influence the decision of how she should be killed off, and finalized the choice to kill her other than the other choice, Barret, as it would have a greater impact on the viewer.
The final boss of EarthBound was inspired by a traumatic experience Shigesato Itoi had during his childhood, of seeing what he thought was a rape scene in a movie as a very young child. The final boss's dialogue ("It hurts... I feel... happy...") was based on dialogue Itoi recalled from the movie (even though this dialogue was not actually in the movie in question). Since Itoi couldn't program, he had to read off the dialogue he wrote to a friend, who typed it in. They were driven to tears while writing Giygas.
In MOTHER 3, as revealed by Itoi in an interview, the final battle in the unreleased Nintendo 64 version was going to be far darker than it is in the released GBA version. The ending was also going to be far more ambiguous and sad. He accredits the happier feel of the released game to "becoming a good person", and he was horribly stressed and depressed during the development stages of Earthbound 64.
Walt Williams, head writer of Spec Ops: The Line had to experience the kinds of horrors the player faces for three years. It's even made him wished that he was desentisized to that sort of horror.
Jordan Garland: In creating something so compelling and, to some extent, distressing, did you ever find yourself in a position where the creative process had desensitized you to the horror it depicted?
Walt Williams: In many ways, I wish it had desensitized me, but unfortunately, it did not. To be honest, Spec Ops was emotionally a very hard game to write. You donít simply come up with horrible scenes, you also have to live them through the eyes of your characters. You have to get inside their heads, see these horrors through their eyes. Then, you have to destroy them on every level. This would be hard enough to experience just once. But, writing a project like this takes time. About 3 years, to be exact. That is a very long time to be immersed in a game like Spec Ops. There were definitely times when I wanted to walk away from the project, because it was taking a serious toll on my life. But in the end, I couldnít walk away from a story and project that was so personal to me and the team at Yager.
Tattoo Assassins gave this to the entire production team. They were people working for Data East Pinball, roped into trying to create a Mortal Kombat clone with the promise of a hefty bonus...if they could deliver a fully-functional game in eight months. You can read how this project crashed and burned here. (Scroll down to the very bottom, the rest is just information about the game's concept.)
Apparently, while chapter 6 of The Way was in production, Lun, its creator, was going through some rough times. Arc V of Master of the Wind was also reportedly made while writer Volrath was in a deep depression. It's much sadder and more pessimistic than the series as a whole.
An Urban Legend said that the real Mike Dawson who starred in Dark Seed had one after making the game and left game design, having a Mental Breakdown. The part about leaving game design is true; however, he didn't have a mental breakdown and begun to teach game design and wrote books on computer programming. Mike Dawson's character has a complete breakdown in the sequel, but that version of Mike isn't a creator - he's just a guy who lives with his mom.
Hideo Kojima was originally pressured into co-directing Metal Gear Solid 4: Guns of the Patriots due to a severe fan backlash, which included death threats, and his original script for the game was rather depressing. He originally wanted Snake and Otacon to be tried for war crimes and executed at the end of the game, but the development team protested, and it got changed to a happier ending showing them retiring (which could be interpreted as another product of Kojima's frustration).
Metal Gear Solid V: The Phantom Pain was a Troubled Production from the start, with Hideo attempting to protest against his own company for their mistreatment of the Video Game Division, especially its developers, and was eventually banned from attending E3 by Konami. This was seen in the prologue as a bonus mission which involved erasing logos of Kojima-developed Metal Gear games (the spin-offs that he wasn't involved in were preserved as an insult), and fueled the controversial plot-twist that cheapened the player's accomplishments in the main game. Finally, he just quit Konami altogether, fueling most of his team to follow him, to make his own weird games.
According to Masato Kato, the head writer for Chrono Trigger, Radical Dreamers was influenced by feelings of frustration he had harbored while working on the previous project - this, he claims, influenced the darker tone of Dreamers and subsequently Chrono Cross when compared to the (relatively) lighthearted Trigger.
The creator of memeticly popular freeware game Flappy Bird had one less than a week after his game was released on the App Store and was downloaded millions of times within a few hours. Theories abound, but the most abundant one is that he never intended and simply couldn't handle his sudden popularity and the money he was earning (not to mention the death threats that tend to come with a sudden surge in popularity and exposure.) After less than two weeks of being out, he pulled the game from the app store and up and vanished. Despite what the rumors say, it was not because of copyright infringement with Nintendo.
This seems to be the general trajectory of Michael Kirkbride, post Morrowind. While he's been contracted to work on other games in the series in minor capacities, his larger engagement with the community has been schizophrenic with personal writings that range from a large personal post modern opus, works intentionally written as Take That! s against other writers in the series, and vehement tirades against people he disagrees with that have increasingly isolated him from fans.
Notch never meant for Minecraft to become a worldwide cultural phenomenon when he created it and never wanted anyone to exalt him as a symbol of indie gamers rising up against big, oppressive, impersonal studios. He went along with it at first and always put on a goofy and gentle face in public, but he secretly began taking steps to distance himself from his creation as early as its official release in 2011. By 2014, he was seriously entertaining ideas of selling off his stake in Mojang and retiring to just tinker around like John Carmack. Supposedly the backlash against the minor EULA changes in August was the final straw that cemented his plans to sell Mojang to Microsoft and made him never want to associate with Minecraft, or any other game with a risk of becoming popular, ever again.
It's also worth mentioning that he married and then divorced during his surge of popularity and lost his father around the time he sold Mojang. Despite his claims that the fame stressed him out too much, he didn't seem to have a similar reaction to the money, as he continued to live very well off. To his credit, though, he acknowledged that he went back on his promise to never sell Mojang to a "big name" like Microsoft and offered his apologies for the whole situation.
In-universe example: in The Magic Circle the player gets to watch the game's fictional head developer completely fall apart through recordings and commentary strewn about the "unfinished" game world, culminating in a massive, pitiful "The Reason You Suck" Speech to the player and all of gaming.
The New Tetris for the Nintendo 64 contained many hidden texts and rants. But most notorious was a long, hidden rant by lead programmer David Pridie. The rant reeks of a creator breakdown from what sounds like a frustrating development cycle for the game. Pridie started off by viciously lashing out against a producer named "D*n" (quite obviously "Dan"). About how D*n was useless as a producer, spent most of his time playing other video games, only did mindless busywork which antagonized the programmers and didn't contribute to the project at all, and that once the rest of the company found out how useless he was, he would be out of the job. He next calls out a designer who he says passed the blame off of work that was rejected by the higher ups, and let another employee take the fall for his mistake. He then names a music composer who, while making some outstanding music, was also lazy, and could go much further had he applied himself. He then announced his departure from H20 Entertainment after the New Tetris project was completed to go work for 3D0. And how while he loved the people he worked with, he hoped it would be a good move. He even says that the game itself "sucks" because it was not how they wanted it, and needed more time to polish it.