Nietzsche, Hofmannsthal, Benn, Musil; Artaud, Breton, Beckett, Plath—why are so many modernist authors concerned with madness? What is the relation between aesthetic experimentation and psychotic ideation (schizophrenia, hallucination, paranoia)? My paper approaches these questions through the framework of Ludwig Wittgenstein’s model of language and his notion of language games, and it focuses on the life and work of Oskar Panizza (1853-1921), who trained as a psychiatrist and ended up in an insane asylum, and whose stories from the early 1890s, I argue, enact the breakdown of literary realism.