7. Polybius
Polybius is one of those legends that has been proven and disproven so many times that people aren’t sure what to believe anymore. At its heart, Polybius was a video game that was produced in the early 1980s that appeared in a few arcades in Portland, Oregon (SOURCE). This game reportedly caused players to become incredibly addicted to playing it but also caused insomnia, suicidal tendencies, frightening visions, and (to make it suspicious to all urban legend debunkers) amnesia.
Because of the amnesia, the fact that no one had ever seen a Polybius machine or even a Rom, many people felt that this really was the work of fiction. However, in 2007, GameSpot published a brief discussion of the game from one of the supposed creators – Stephen Roach. In this article, Stephen outlines that he and 3 other programmers formed a game company called Sinneschlossen in 1978. They developed an arcade game with a puzzle element and tried to encapsulate the need to keep gamers attention since the arcade boom was going full strength at the time.
Their first test market was in Portland, Oregan and the game was testing well until a 13 year old boy apparently had an epileptic fit while playing the game. This forced the distributors and funders to pull the game out of the market and dissolve the project. Roach finally concludes that there were 7 cabinets produced for the game and that none of them look like the shots that float around for the video game. There also has not been any sort of ROM released since their project was scrapped so quickly.
Of course, this story comes with an adequate amount of skepticism.
The full interview can be read via the Way Back Machine: http://web.archive.org/web/20080507174244/http://bitparade.co.uk/modules/articles/article.php?id=21