Saw something like this over at IGN. With one major exception, I mostly disagreed. Here's my top ten:
10. Rodrigo Borgia (Assassin's Creed II)
How often do you get to kill a pope? Never! Rodrigo Borgia (aka Pope Alexander VI) has essentially the same goal as the protagonist: he wishes to know the true nature of God. To this end, he does everything in his power, including becoming Pope, solely to gain access to the Vatican. He murders the character's family, bribes countless people, and basically performs every dirty trick to become the holiest person in the world. This is truly great characterization.
9. Through the Fire and the Flames (Guitar Hero III)
For those of you who protest and say this isn't a villain, you obviously haven't played this yet. I still remember when I first beat this "boss" on Hard difficulty (I can't even get passed the first few seconds on Extreme). I just had the biggest grin on my face. I was so satisfied that I had to turn the game off. Granted, my arm felt like it was going to fall off so I couldn't play any longer if I tried, but it was still the opposite of a rage quit. It was a joy quit.
8. Majora's Mask (Legend of Zelda: Majora's Mask)
Majora's Mask takes such a high spot because of its sheer gall. The mask comes across a heartbroken skullkid, freshly rejected by his group of buddies, and takes complete advantage of him to complete its own ends. He compounds upon his host's annoyance and amplifies it into pure rage and drives him to destroy the world of Termina. Add to that one of the creepiest forms a final boss can take and you have a true villain.
7. Dr Ivo Robotnik (Sonic the Hedgehog series)
The thing that brings the good doctor up this high on the list is how he is introduced in the first few games. His plan to take over the world: capture a bunch of tiny animals and turn them into robots. Why? What else would you use a robot-making machine for? Cyber-punking a credenza?
6. Sander Cohen (BioShock)
"So say goodbye to those two blowhards and hello to an evening with Sander Cohen." With those words, you are introduced to one of the maddest characters of all time. Plaster coated ballet dancers descend from the ceiling and the stage lights go on. He came to Rapture as an artist to work in complete freedom. This freedom allowed his out madness and, thankfully, gave the player a nice break from the Atlas-Ryan clash. It was my most memorable part of the game.
5. Gehn (Riven)
The man who fancies himself a god. He tries to murder his son, he imprisons his son's wife, and, if you play your cards right, he sings opera at you. His unstable ages are essentially a metaphor for an unstable mind. It's just so much fun to replay Riven to reach the end and meet this fascinating villain. I love it.
4. Revolver Ocelot (Metal Gear Solid series)
Just whose side are you on, Ocelot? I have played all four of the "Solid" games, and I'm still not completely sure. Either way, your choice of weapon and the skill in that speciality are top notch. Plus, your relationship with Snake, that of a friendlyish-rival, is so much fun to watch. Keep doing that hand gesture.
3. Alma Wade (FEAR)
FEAR. It remains the only game that truly scared me. I can basically give all of the credit for this to the creepy little girl that has a penchant for appearing at the top of a ladder forcing a rapid bowel evacuation upon the player. Best of all, she has a legitimate reason to be evil. Rather than trying to steal the princess or take over the kingdom, Alma was trained from birth to be a soldier, got knocked up against her will, had her children taken from her, then got put into stasis for years. She hates everyone, and I wouldn't have her any other way.
2. Psycho Mantis (Metal Gear Solid)
For me, the best video game villains are the ones that don't simply get into the player character's head, but get into the actual player's head. Aside from the one just above, no character does this better than Psycho Mantis. He doesn't just talk to you, he even checks out what games you've played and moves your controller across the table with his mind. It was genius and remains one of the most frustrating boss battles.
1. GLaDOS (Portal)
Genetic Lifeform and Disk Operating System. GLaDOS is your only companion. GLaDOS is your guide through the labs and trials ahead. GLaDOS is polite and, like any good host, offers cake. Oh, and GLaDOS is also going to murder you. The contrast is just amazing and mind-blowing. My favorite part is just "her" nonchalance when it comes to matters of death. "I was going to invite your best friend, the companion cube. But he couldn't come because you murdered him." By the gods, just brilliant. GLaDOS isn't just the best game villain, "she's" probably the best video game character of all time.
Honorable Mention: Bad Controls (Scribblenauts)
When I first acquired Scribblenauts, I was so excited. I became a god. At least, I felt that way until I actually started playing and realized that it was an unplayable mess. My wings melted and had my pessimistic weltanschauung reaffirmed.

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