I can't believe you guys even seriously discuss this topic.
Of course Polybius exists, the company which created this game was "Sinnesloeschen"; it's German for Erasing Senses; therfore it must be true. A secretive corporate or governemnt conspiracy makes always dumb mistakes like that, they want to keep something top secret, and then they give it away.
I played this game in a bar in Germany in the 80s. I saw the arcade machine, remembered how much fun it was to read Polybius (who wrote a very modern version about the seperation of powers, btw), and I started to play. I remember only a big pink alien on the screen, then I had a blackout...I dunno...I can't remember a thing what happened. The next morning I woke up in a bed, and beside me was a beautiful woman, who said: This was the best sex of my life, you are my hero. Right there I knew something was fishy because all the women I slept with made fun of me afterwards. This women turned out to be Farah Fawcett.
Since then I know Polybius isn't merely an urban myths, and I know that Farah Fawcett is actually an alien, green, pink, I don't care, it just freaks me out. I tried to warn the world, but noone listens.
If I disappear after posting this, please tell the world my story.
I swear to God it's true, it really happened.