Dream logic and its derivatives can be employed regardless of art style, budget, and target audience, yet sometimes I feel as if I'm the only one fascinated by this method of framing a game.

"It's too unrealistic."
"It's not immersive."
"It's too convienent."
"It kills my suspension of disbelief."

No, no, no, no- properly applied dream logic doesn't do any of that. Insane moon logic (IML), on the other hand, does... and it's the bane of countless (even otherwise good) video game plots. IML is absurd (Bionic Commando wife/arm!), dream logic at least has the pretense of fitting naturally in the context of a narrative.

Let's look at possibly the most obvious example: Link's Awakening. Oddities like Chain-Chomps and Wind Fishes are easily explained by not needing to be explained. It's a dream, so it's not necessarily an absurdity. Even experts on dreams can't claim to fully understand the subject of their work. And best of all, the game tries to make the player care about the dream world and circumvents the apathy associated with the "it was all a dream" trope.

Horror media in general is like the silent protector of dream logic. Some of the best horror stories ever told play up the nightmare/unknown/imagination angle, and among video games, my favorite example is Silent Hill 2. It does a phenomenal job of explaining what only needs to be be explained, and that largely boils down to a great many things being born from the protagonist's mental state, including Pyramid Head. It's great.

Plot holes? Not as much of an issue as before. Problems only arise when a game contradicts it's own logic.

Compare with the "ludonarrative dissonace" debacle last year in which some games that aimed for more grounded, less pulpy/dreamy/strange presentation were criticized for having lots of violence that didn't mesh thematically. I'm not one of those people, but I get where they're coming from, and the situation is avoidable. Genre savviness and sheer creative vision can rise to the occasion without compromising all-important reality. Don't take this as a condmmnation- games that refuse to handwave harder than a legion of concert-goers can be perfectly fine. I just think it's a tricker balance between gameplay and presentation, in the end. Few games do it well, and the ones that do may still have occasional conflicts between game and experience. The Last of Us is a potential example, but I'd like a few more years of distance and meditation before coming to a conclusion about whether or not Ellie's invicibility ruins the atmosphere. Ugh. I hate being forced to think about games this way.

But hey, it's simply my taste in framing devices. And while it does allow for an immense amount of potential creativity, there's an equally immesense possipility of screwing the pooch. Particularly when narrative cleverness and/or complexity is prioritized over gameplay. That, I'm afraid, is probably the subject of my next thread whenever I get around to it.

That is some inception stuff right there. Interesting read. As a young boy, i used to read this book series called "Goosebumps". Now as an adult i don't really like horror genre as it focuses more on gore and shock scares. The cool thing about about Goosebumps most of the time was that it is the slow psychological build up into the uncanny situation. The ending also had a surprise, that the reader most of the time didn't see coming.

Where i am going with this. Well not far, the books that ended up being all a dream were somehow the most disappointing. So, i guess it works sometimes and not others.

Seems like that book series is just hit and miss, then, plot-wise. Video games offer a potentially different take on horror and the dream trope. The Legend of Zelda as a whole can be interpreted through a relative of dream logic: legend logic. We may just be playing an embellished version of Link's deeds, assuming they happened in some form sometime in Hyrulean history.

It depends on how it is utilized but more often than not relying on dream logic will drop you into deus ex machina, which is just lazy writing.  It worked well in link's awakening because,

it wasn't link's dream, it was the windfish's.  Koholint was a real place it simply existed, in essence, within the god-head's mind.  It left you feeling a twinge of regret waking the fish, because the land and all the relationships and bonds you created during the adventure would cease to be, yet at the same time produced a sense of closure because you know that somewhere and in some way they are still there.  If in the end the whole thing wound up being link's fever dream I would have taken a hammer to the cartridge because it would have made the entire experience a cop out.

Mario 2 is another example, but the way they got mario and gang into that game at all was via dream logic so I suppose it's something of a wash.

Ehh,  i read your OP and you call one of my favourite book series hit and miss. It was pretty great bunch of books and sold around 350 million copies. The only hit and miss ones were dream sequence. :P

I get your point though. The dream sequence can give the creator more freedom in coming up with imaginative things. Not sure if a good game or not as i didn't finish it but Alice: Madness Returns does that quite well. The world is a darker take on Alice in Wonderland as the things could be taking inside her mind. 

Some say the entire world is a dream of the divine. That is good mystical note to end my post.