I put it in System Wars because these kinds of games have been so prominent and so high selling over the past 5-10 years.
During the past gen, games have explored storytelling. However, most of this storytelling involves the following: violence, black shiny guns, commanders, half-naked sexualized women, hostages, people being impaled, monsters, zombies, towns being blown up and the like. Even some of the more serious stories have been over-emotional, corny, and the like.
Games want to be provocative and edgy, so they can look badass and the player can feel like a juggernaut of destruction. But I honestly think its the equivalent of teenagers slashing holes in their jeans to look "cool". Years from now, we'll probably say (about gaming from 07 to 2014) that it was trying too hard to be edgy.
So, when Nintendo said they weren't interested in serious stories, I think it moreso was a polite way of saying they wanted to avoid this trap. I have nothing against violence or serious stories but there needs to be substance behind the story.
Obviously, I don't want to live in Disneyland where we only have cartoony platformers, but it really feels like we're going through a phase right now.
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