This will probably mostly be fighting games but after learning about the wonderful Jogurt I figured I shouldn’t limit ourselves
I will start with the best example I can think of, the many characters from Fighter’s Megamix on Saturn
Kids Akira and Kids Sarah, chibi versions of fighters already in the game
Hornet, the car from Daytona USA
Mr. Meat
Kumachan and Pandachan
Thank you to Kumachan / Pandachan (Fighters Megamix) for pointing out that they’re probably the only fighting game characters to not have any animations, that didn’t hit me until they said it
And lastly, AM2 Palm Tree
which is just the dev’s logo haha
“Joke character” might be a bit harsh, but the middle series Final Fantasy games often have that one character that’s so much goofier than the rest.
Mog in FF6
Caith Sith in FF7
Arguably Laguna in FF8 (sure, he looks like a normal dude, but him and his pals are just these clumsy idiots all the time, and then he becomes president)
WCW Nitro for the PS1 had a huge list of very silly secret characters, including but not limited to: a wasp, a cow, a bear, a clown (not the normal wrestling clown but a funny ha ha clown), a ghost, a frankenstein, and a dinosaur.
Dan Hibiki is the most iconic for me. A) because he was the first joke character I ever encountered and B) it’s really funny that he’s treated like a joke character in the actual SF lore, it makes his rare poignant moments all the more striking.
Tofu in Resident Evil 2 comes to mind. I remember reading guides for the game before I could ever play it and having no idea what tofu even was at that point.
(Oops I missed that this was already posted, my bad!)