I had a dream where I was playing a psychological horror game where the mama penguin from Mario 64 lead you through a canyon and told you about her extremely depressing life story the whole time, no gameplay apart from walking behind her with the left stick. Her flipper dragged along the wall of the canyon and left some kind of red paint behind (was not blood) and you could also see a red line of paint following the same path but much shorter, implied to be the kid that Mario tossed off the cliff. I don't think Mama Penguin was the villain though, she's just sad, and I think she brought you to the canyon to hide you from the actual threat of the game.
Genuinely more unnerving than any actual psychological horror i've seen or played.