I imagined a game just recently where the main character is conscious of the forth wall, and the only character in the in-game universe that IS, so nobody believes him. Storywise though, this would be represented by him mentally 'hearing' all the player's controller inputs, and rather than being directly controlled, he simply chooses to listen to them.
Basically, his character arc would be something like: You'd start the game Chrono Trigger style, with the MC waking up in his bed room, you'd get the stereotypical onscreen prompt "Use Joystick to move around" and the player would probably try moving around, but the Main Character would not only not move around, but be initially startled and confused, having a schizophrenic voice in his head telling him to move around. He'd initially completely ignore the 'voices' and continue about his day, making the 'tutorial' seem completely broken and busted. He'd also be able to see the onscreen prompt and wonder what the hell these intangible letters in his bedroom are, and then go to take a shower and wonder why his privates are blurred out with a mosaic, it'd be a startling realization to being a videogame character.
The MC's personality is that he's an utter and complete loser with no motivation in life, being a filthy, jobless, and completely unambitious mooch on everyone around him. His character development throughout the game would be that he'd be initially trying to ignore your commands, then reluctantly obeying as he grows accustomed to them, then indifferently following them as he sees that he is now being touted as being 'successful' and 'getting his life together', then as the game goes on he becomes happier and happier with the life that the "Voice in his head" aka You The Player have given him, and he becomes increasingly eager to follow your commands even when that means doing things he finds morally reprehensible. Near the end of the game, he'd be a complete sociopath who's totally divorced from all sense of personal accountability for his actions.
Then at the very, very end of the game, at the final boss, he'd realize "Oh... shit... this is the end" and then start disobeying you active again, as he wants to prolong the game because he knows once he finishes the last challenge in the game, his "Voice" will leave him, and he'll be alone and worthless again. Once you try to force him to face the last challenge, he has a mental breakdown, and bawls and cries on the ground, begging you to remain with him forever, and how much you mean everything to him. I haven't decided how I think the game should end, besides him sabotaging your efforts to win so you HAVE to keep playing.
I think that'd be interesting.