The game has at least 7 possible endings and most of them are bad endings.
The first ending: Michael goes completely mad and hits Katherine on the head with a hammer, which kills her. He buries her body in the garden and him and Allison completely give in to their delusion that Jody is alive in the form of a doll, which ironically brings them closer together.
The second ending: Michael goes completely mad and knocks Katherine on the head with a hammer, which seemingly leaves her brain dead. Michael and Allison completely give in to their delusion that Jody is alive and put hapless Katherine in Jody's room to take care of her, since they now believe that she is Jody.
The third ending: Michael goes completely mad and hits Katherine on the head with a hammer, which kills her. He buries her body in the garden and him and Allison completely give in to their delusion that Jody is alive in the form of a doll, but this apparently does not bring them closer together, since Allison moves away a bit when he tries to kiss her.
The fourth ending: Michael goes completely mad and hits Katherine on the head with a hammer, which kills her. He buries her body in the garden and him and Allison completely give in to their delusion that Jody is alive in the form of a doll. Dr. Turner visits them one day and gathers from Michael's insane behavior and indirect confession what has happened. He calls the police, Michael is arrested for murder and Allison is committed to an insane asylum.
The fifth ending is the closest thing to a good ending: In a fit of rage Michael hits Katherine on the head with a hammer, but she doesn't die. He realizes what he has done and immediately calls the ambulance. They arrive in time to save her and Allison comments that maybe they didn't really need a nurse after all.
The sixth ending: In a fit of rage, Katherine hits Michael on the head with a hammer, which kills him. She tells delusional Allison that Michael has attacked her and that he won't be coming back. She also continues to lead Allison to believe that Jody is alive in the form of the doll. Katherine promises Allison that she'll stay with her and take care of her and that the two of them will have lots of fun together from now on. In her voiceover during the credits, she implies that the two of them are now living together in harmony and seclusion and that Allison still takes care of her Jody doll.
The seventh ending: Enraged Katherine and Michael begin fighting over the Jody doll, but before either of them can kill the other with the hammer, Allison arrives to take the doll away from Katherine. Katherine refuses to give it away and in the commotion loses her balance and falls down the stairs, which presumably kills her. Shocked Michael stares at her motionless body.
The straight-to-video 2h feature length movie that the game was edited into ends with Michael going completely mad and killing Katherine with a hammer. He buries her body in the garden and him and Allison completely give in to their delusion that Jody is alive in the form of the doll. Dr. Turner visits them one day and gathers from Michael's insane behavior and indirect confession of the crime what had happened. He phones the police, Michael is arrested for murder and Allison is committed to an insane asylum. This is one of the game's several bad endings.