Ars:
Instead of building a complex solution, the team turned the "sanity meter" into a persistent system that applied no matter how well or poorly a player traversed through the game. Players always saw the sanity meter on the screen, and they saw crazy visual effects fill the screen when that meter dropped to a low number. What's more, the designers made sure that no matter what path you took in the game, you'd always see the sanity meter drop.
...
"there was no real fail state. And it worked better! We don't really [tell players] what the consequences are for [losing sanity]. But the player assumes, right, if I lose my mind, I'm not going to be able to play. I might die or be harder to control."
