So you think you've got an OGD. You now realize that one of your beloved designers -- whom you've put so much hope into, and given key tasks -- is actually responsible for a drop in productivity within the team, an overall bad mood, and a general feeling that makes people afraid to speak up. The consequence may be mild, but the bottom line is that things would be way better than they are now if this designer turns his negative behavior into an uplifting collaborative attitude and puts his skills forward to help everyone.
First, you need to do your homework. Consider the symptoms you've noticed, and write them all down. Dig up the repeated mentions you've found in the performance reviews, list the emails or discussion outbreaks, run stats on how often personal evaluations were higher than those of his manager. Make sure you compile all the elements that demonstrate a problem. You'll need a substantial stockpile of ammunition going into this because that's how you'll get your grumpy designer off-balance and bring down his mental fortress, so he sees it from your perspective.
Book a one-on-one meeting and explain the situation. Point out how it doesn't live up to your expectations and try to have your grumpy designer acknowledge that he has a part in it. You will see him resist, argue, and redirect the discussion to his successes, put the blame on external factors, and so on.
That is where your preparation should pay off. With concrete examples coming from different sources and different time periods, you should be able to get through to him.
The main idea is to keep things positive, though. The message that needs to come across is: "Yes, we know you are good and have skills. We recognize that, and it's the reason you've made it this far. Now, you are stuck in behavior that holds you back and is toxic to the team. Let's work that out."
Having him realize that he has a negative impact on his teammates plays a big part in shaking the OGD out of it. I've seen several of them respond to the idea that they were hurting other people that they work with. "I don't want to be toxic," they'll frequently say.
It is a delicate discussion to have, and it can become quite heated -- in which case it's hard to get your point across. Receiving such critical feedback is very personal and emotional, so be ready for a ride.
I believe it is best to separate this effort from official performance reviews, so as to reduce the tension that comes with those formal processes, and instead make it clear that this is a personal development initiative aimed at helping the designer out of a career pitfall and back on track. That is also why you don't want to rush it. It is natural for them to resist what can be perceived as criticism, and you might want to adjourn the session, let the feedback sink in, and start the discussion afresh a few days later.
From my experience, a mix of preparation, good will, and humor can get you through that process and secure incredible results. To my amazement, I have witnessed complete turnarounds in a matter of days. The passion that defines people in the video game industry tends to amplify behaviors and reactions. Fail to provide proper direction and purpose, and you will witness confusion between consuming content as a player and creating content as a designer, in addition to a personal focus instead of one on teamwork.
The truth is that if you motivate our genetically ingrained tendency to perform for the betterment of the group, you will see passion take over and turn OGDs into key players in your team within moments.
Here's a concrete example of the turnaround: after having explained to designers that it serves no purpose to keep grumbling about how the project will never truly compete with the game they respected so much -- when all that was asked from them was to do their best within existing constrains -- arguments quickly stopped within the team. The very next day, their lead saw one of them pop his head away from his screen and say to him: "It feels so good just being professional!" and went on to blast through the tasks at hand. Let me repeat that: the very next day.
Change can take some time, though, and I recommend booking follow-up sessions to acknowledge improvements while identifying the areas that still could improve over time.