Okay, so, my favorite character in a video game is PROBABLY Nier from, well, Nier, but he doesn't really change much from the beginning to the end of the game. So I wondered who had the best character development...
(put all spoilers in tags, if you would)
Mine, just from thinking about it for 10 minutes, is probably Dan from Binary Domain? It was a little hamfisted, but his interaction with Cain and then when Faye turns out to be a hybrid, he has learned that robots can be people too, but it was done subtly and I really appreciated it. It reminded me of the first book with Olivaw and Daneel from Asimov's robot detective series.
Alternatively Lightning from Final Fantasy 13, but that's more of a joke answer considering how 13 starts and how 13-2 ends:
13 start: she's a fantasy cop.
13-2 end: she is basically a god
I just think it's really funny I don't know