The problem with story telling in games is for the most part developers resort to breaking the gameplay to tell the story. Games usually resort to two methods to tell stories either text or cutscenes. Both these methods stop you from playing and it ceases to take advantage of the medium. Not only does it no take advantage of the games but its ceases to be a game. Its a game that uses movies or novels to tell stories. Games will never come into their own if they continue to play second fiddle to film and literature.
Another issue with medium when it comes to story telling is pacing. In a game Final Fantasy Tactics you read text for 30 minutes then battle for 30 minutes. This is terrible for the story and gameplay and destroys the flow of both. Then there is the issue of difficulty. You don't wanna make the game too hard and ruin the pacing but at the same time you need to keep it hard enough to keep up tension. The video game medium is inherently flawed when it comes to story telling.
Limited range of story is a issue do to the need of gameplay due to gameplay. When you right a story you have to write it with gameplay in mind which makes the writing harder and then gameplay comes secondary. The other option is to create the mechanics and write a story around it but then the story is just tacked on with no purpose. Stories in games take away from the story and the gameplay takes away from the story.
What games do well is not story telling but but world building and immersion. I think a story can be used to strengthen those aspects but they can be done through other aspects. You can still tell a story that strengthens things do well like in Portal 2. All the story telling is done with the player in control. The actual story telling is minimum but there is enough there to immerse you in the world. The reason the game is so great is that it fully realizes the world it set out to create. Its the same reason a game like Bioshock is so great. The gameplay is nothing special but Rapture is just a place you want to explore.
Maybe games one day will be able to tell good stories and take advantage of what games have to offer but I don't see it happening any time soon. Developers need to learn how to blend gameplay and story. The best example I can see is Bioshock because it kinda tells a lot through the enviorment. Also Ico, Journey, Portal 2, and Shadow of The Colossus are good examples. Although I have only play a little bit of bastion I think its approach to story telling could be beneficial for the industry.Planescape Torment is not because when you spend more time reading then you do playing its a terrible example of how to tell stories in games
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