LSD - Dream Emulator
Developed/Published by Asmik Ace Entertainment. Released on October 22 1998.
Japan had experienced the shock of the jump scare back in 1998, long before the Slenderman myth ever began. The video game named LSD - Dream Emulator released. It was the first time a game had used a flashing image into the experience with the intent to startle people. Asmik Ace Entertainment created the game based on a dream journal that their artist Hiroko Nishikawa kept.
The entire LSD game takes place in the drug induced dream world this author described about in his journal. You explore different hallucinatory drug trip scenes filled with strange animals and colorful buildings. Bumping into any object or falling off a ledge will take you to another random dream.
There aren't any other characters or NPCs in this dream sequence, except for a man in an all grey coat and hat - he became known as "The Grey Man". He can show up in your dream at any time without warning. The Grey Man doesn't even walk like a normal human, instead gliding towards you like a ghost. If you get too close to Grey Man, he corrupts your dream sequence and renders it unplayable.
LSD - Dream Emulator is a scary game because it taught players the meaning of the word "jump scare" by giving us an example through the surprise appearances of "The Grey Man". The faceless evil that had the power to intrude into the player's dream level at any time forced the viewers to be on their guard. It also makes you wonder what kind of Grey Men haunt your own dreams.