Probably 10-20% of the people on the dev team just loved it. They couldn't get enough. That includes engineers and artists. They could work from 9am to 11pm for months.
But then management expects 100% of people to be like that. And there's peer pressure not to let down your coworkers. But in reality some people just have more stamina, and can get more done with the incremental hour, while for others it was just clocking time and being a zombie.
I definitely couldn't get much more done in all those late nights, although it in part it has to do with the fact that there was some sort of "schedule". If you know that you can take a day or 2 off whenever you want, you're likely to have more stamina for a 16 hour bender.
Anyway, there is so much human variation in other things; it doesn't surprise me at all that it's true for how many hours you can productively work in a day. I would bet startup founders need that stamina, although I'm sure there are many more components to success.
My experience through various sectors of the software industry (including gaming) is that virtually nobody really works 9 am to 11pm for months. But some people are happy being at the office from 9 am to 11 pm assuming the "work day" includes a multi-hour team lunch break, some random breaks for playing Doom II, Diablo 3 or the newest Battlefield or whatever is hot at the office, lots of slashdotting/redditing/HNing/etc, hours long discussions about what happened on the hot geeky tv show, etc. So what it comes down to isn't even the workaholics vs the non-workaholics, but the totally tech-focused geeks vs the people who have non-tech things going on in their lives.
FWIW, up until my early-mid 30s I was very much the former, so I don't entirely begrudge that lifestyle, but I think it is mostly fantasy that those people are putting in significantly more actual work hours than the other group. Personally, I know I'm vastly more productive putting in 8-ish hours day now than I ever was when I was putting in 16-ish hour "work" days, though everyone's mileage may vary.
That said, there was lots of downtime, mainly for people whose brains were burnt like mine. Never multi hour lunches though.
It would be surprising if on a talented team there simply weren't people who had much more stamina than others, or just enjoyed their work much more. I'm not saying there's something to be glorified or emulated there.
All management that I've seen dislikes people with 'distinction', 'rock stars', 'mavericks'... The reason is they make rewards inevitable.
The cult of management likes to believe in comparative rewarding. Its believed if all are same, no one deserves a reward.
Besides I've met a few managers who mark awesome performances as just 'meets expectations' because they expected you to be awesome and you were just that. So no reward for you.
Management survives on averaging and normalizing people efforts to minimize giving away of rewards.
Now, the same cant be said about writing TPS reports.
A few nights ago,I got jazzed-up on the Vietnamese Iced Coffee I'd had with dinner, and I literally coded all night and into the daylight. I probably started around 8PM and ended around 9AM, working on my hobby project.
And honestly, if I hadn't been jazzed up, I would have stopped somewhere around 1:30AM, to my own great benefit. By the end I was spending half my available effort just staying awake and remembering how my code is broadly structured.
If I'd had to do something other than cycle through compile-run-debug, I would have failed completely. No matter your caffeine or passion levels, at some point you lose sanity points and Cthulhu arises from the depths to eat your code and then your soul.
Now, imagine the same hours on someone else's tasks and according to an inflexible schedule. Would it be the same? I think not. I imagine that is what you meant by 'grinding'.
So bottom line is that it's futile for management to push people that hard. Some people love the problem and they'll put tremendous hours int oit. But you can't force that upon anyone.
On the other hand, perversely, I can see the logic to it. There are 20% of people who are running full stream and being super productive for 14 hours a day. Maybe you just keep everybody in the office so that those people feel like everyone is making a sacrifice too? If you don't care about burning people out, I guess it is rational to keep people in the office if only 20% of people get more work done, if those 20% would leave if everyone wasn't there.
But how long did they keep this up for? Months-long crunch times popping up for, what, 5 years? Or did they keep this up for 10, 20 years? Burnout and health effects can take years to show up.
I suspect those that do this and keep up the pace move on to more organizational work later on, which isn't the same thing.
Lots of people leave the game industry like me, but there were definitely those who did it for 10 years straight.