During the events of Arkham Asylum, the most hardcore and utterly deranged of the many grim cases at the Asylum were released from their cells by Joker. It was worth noting that, after doing this, one of Joker's many taunting messages over the public address system included instructions for his henchmen to put those lunatics down on sight, which many of them failed to do. Joker seemed to have ordered their release strictly to harass Batman, but as much as he relished their madness, Joker was not sure if the lunatics would prove to be a hindrance to his own mad plans, or if they wouldn't actually be able to overpower Batman.
Living up to their name, they had no grand designs or iconic motifs, and had only purest insanity that drove them. They were seemingly incapable of coherent speech and instantly attacked anything or anyone in their sight. Only complete unconsciousness or death kept them from attacking in an all-out frenzy that was capable of badly and rapidly injuring Batman, something even a single blow from a Titan Henchman could not truly lay claim to. They seemed to lack a significant feeling of pain, and their metal harnesses helped them to withstand brutal kicks, punches, and even shotgun, assault rifle, and sniper rifle gunshots. Facing more than one in the same area could be difficult, and they were the main reason that the Totally Insane Combat Challenge Map could only be endured, and never truly beaten.
The Lunatics could not truly be described as henchmen. The Joker had no control over them, and was at least careful of them. It was possible that releasing them was a contingency, rather than part of whatever made up Joker's original plans, as conversations between Joker and Harley indicated that Batman was progressing faster than Joker cared for. However, Joker may have been planning on releasing them since early in the game, as he opened up the tunnel between Arkham East and Arkham West, presumably to spread them out and ultimately doom the henchmen that were stationed there, as he most likely did not care for them. That caused a couple of Joker's Henchmen to question the tunnel's opening before the Lunatics were released.
The Lunatics seemed to embody the deservedly nightmarish reputation that Arkham Asylum earned: the themes of insanity, depression, severe isolation and loneliness. Their very existence was an assault on all the senses, perhaps not evil, but certainly badly lost souls that were still capable of horrific acts as the pain in their minds pushed them to inflict pain and death on others. Notably, they were the only lethal obstacle besides electric floors and screens that could still harm Batman even after Joker's final defeat.
Their appearances prior to incarceration in the Penitentiary were lost. Their appearances in the game were almost all uniform, madness plus the necessities of extreme high security confinement that left them all looking bald, hunched over, and skinny, with their insanity-driven strength that compensated for their lack of bulk. They appeared in varying degrees of broken restraint, with many having only the merest remnants of it still on them.
Before Arkham Asylum Incident
During his time at Arkham Asylum, Dr. Hugo Strange studied the inner workings of the brain. In order to do that however, Strange experimented on the more forgettable inmates. In order to cover up his illegal operations, the Arkham Lunatics were lobotomized by Strange, driven to madness, locked up and forgotten, and only received one small meal a week, hence their skinniness. During his experiments on them, Strange perfected the Mad Hatter's post hypnotic suggestion technique, to later use on Warden Sharp and the TYGER Guards. The Lunatics that escaped either committed suicide at Dead Man's Point, or found a cave to live in, and ate the growing fungi and licked moisture off the walls.
Arkham Asylum Incident
After Batman found Warden Sharp, Joker revealed to him through live security footage that Harley Quinn had released Poison Ivy from her cell to run amok. After expressing admiration for their antics, Joker released a large group of the Arkham Lunatics from their containment units to attack Batman throughout the remainder of the incident. They were later assumed to have been placed back into their cells once Joker was finally defeated.
After Arkham Incident
Most of the surviving or injured lunatics of the asylum were treated medically, before they were taken under the "care" of Strange to experiment on. Several of them were later supplied to the Crime Lord, Penguin, for his forces to use as "target practice" when Strange attempted to recruit him.
Arkham City Incident
While there were no signs of the Arkham Lunatics inside Arkham City, a large number of dead ones (as well as other inmates) could be found hanging from the ceiling by their wrists at the main entrance to Wonder City.
As seen in the Arkham City Stories, the Lunatics were failed experiments that were created by Strange. It was rumored that he kidnapped prisoners and experimented on them. Those stories also said that Strange's successful test subjects served as the TYGER Guards. It was also revealed that they were used by Strange to continue his experiments on mind-control in order to properly "influence" Mayor Sharp.
In Story Mode, lunatics were often found roaming aimlessly in the opens areas of Arkham Island muttering to themselves or performing various bizarre activities, such as running around at nothing, trying to catch flies, or scratching at the ground.
Once they spotted Batman, the Lunatics ran toward him while screaming, jumped onto his back to assault him, and ultimately tried to crush his ribs and lungs. The player could stop them from latching onto Batman by pressing the counter button, smashing them on the floor, or striking them to performing a Ground Takedown in order to disable them. If they were already on top of you, they could be thrown off by mashing the run button. That meant that this method could be used to throw them great distances of height, which shocked them and made them pass out.
Lunatics are the most resilient enemies in Asylum. Unlike all other enemies, mere strikes cannot finish them off. The only way to incapacitate them for good is to use a Ground Takedown or Ground Pound on downed lunatics, or lure them into electrocuting themselves at electrified doorways while they're jumping at you, or (only in Story Mode) make them fall from great height with a Batarang. On the other hand, they are easier to knock down the ground with any counter (Freeflow or not), and they cannot dodge Batclaws. Note that Ground Pounds are slow, so it's advisable to time them properly.
Due to their relentless resilience, lunatics are featured in an endless combat map called "Totally Insane". You can use them to drain your health faster once you have accumulated a satisfying combo.
- The Arkham Lunatics technically did not belong to any faction as they were completely insane.
- Some of them could be seen eating rats around Arkham Island.
- They were the only enemy type that didn't make a return in any other title after their introduction. However, some dead lunatics could be seen in Arkham City, when a weakened Batman entered Wonder City, and were also alluded to in one of the Gotham City stories where it was rumored that Professor Strange had provided the lunatics to Penguin as "target practice", which was indirectly confirmed in one of the interview tapes where Penguin mentions them as "dribbling monkeys."
- Lunatics dressed up like Batman could be seen during Scarecrow's Final Nightmare.
- Considering that the Character Trophy for the Arkham Lunatics was present in Arkham City, it was possible that the Lunatics were going to have a bigger role and a larger presence in the story, but ultimately their appearance was scrapped, save for the ones that were hung in Wonder City.
- Many Lunatics were able to withstand gunshots of almost any gun, and only two inmates were killed by Joker's Henchmen in Arkham Asylum, one from being shot multiple times in Arkham North, and another one lying stone cold dead in the area between Arkham North and Arkham East, after being beaten to death by a group of 8 Raincoat Henchmen.