The video games industry definitely comes with a lot of stress, but they rely on passion to get value out of those long hours.

That's called exploitation, plain and simple. It's predatory behavior. They are knowingly under-compensating and over-working people, knowing that they can get away with it because of this passion. Say the same about just about any other industry and it's clear how unacceptable it is. Beyond that, stress, objectively, causes unnecessary illness and death, as proven in decades worth of scientific studies.

This sounds like a situation of completely awful management, which won't be fixed with a union (at least not immediately), since a bad manager can make life suck even if you have decent benefits, reasonable work hours, etc.

Bad management is literally one of the foundational reasons that unions exist in the first place. Management and capital have a significant power imbalance with workers and have, historically and currently, attempted to establish workplace environments and situations that are more exploitative. Collective bargaining is necessary to even the odds and allow for workers to air grievances and get them resolved, without punitive action.