The Polybius Mystery:
Polybius is an arcade cabinet described in an urban legend, which is said to have induced various psychological effects on players. The story describes players suffering from amnesia, night terrors, and a tendency to stop playing all video games. Around a month after its supposed release in 1981, Polybius is said to have disappeared without a trace. There is no evidence that such a game has ever existed.
The game has shown up in movies & tv shows like The Simpsons and Wreck it Ralph.
As interesting as this urban legend is, the theories behind why it exists are also pretty fascinating. Supposedly the tale of Polybius might have been based on exaggerated and distorted stories about an early release version of the game Tempest that was known to cause photosensitive epilepsy, vertigo, and motion sickness. Mixed with two arcade goers in Portland in 1981 who fell ill on the same day, one collapsing with a migraine playing Tempest and another suffering stomach pains after playing Asteroids for over 28 hours. Further coupled with FBI raids on and FBI-agents monitoring machines in several arcades in the same area due to the arcade owners being suspected for gambling. (source)
All of that might have added up to create what we now know as possibly the most famous video gaming urban legend ever.