After recent RAIF discussion and the Gamasutra article on Far Cry 2, the rest of the world is also talking more on the question of how narrative can be constructed in games — out of what pieces, and in what sense it can be narrative.
A lot of the discussion comes back to traditional issues we’ve seen before: people re-discovering, for instance, the conflict between freedom, agency, and story. A lot of the techniques suggested (sandboxes where the player has to make his own story; branching narratives; narratives constructed in partial reaction to the player’s behavior, by some sort of drama manager) have already been floated a bunch of times.
For myself, I actually feel like I’ve talked out this topic for the time being, but it’s interesting seeing what everyone else is saying.
Emily Short's Interactive Storytelling 
L.B. Jeffries’ comments struck a chord with me, I can’t help but agree with his assessment:-
“With enough potent symbols and a willing subject, you don’t really need much control over the narrative at all. The player will create the story for you.”
It’s certainly true for me. The things that have stuck in my mind the most from my gaming experiences have not been the main narratives that the authors intended, but the little side-stories that have occurred through my interaction with the mechanics of the game.
An example of this that will be familiar to most console gamers is the Grand Theft Auto series. A significant number of players seem to prefer to cruise around the city and cause some chaos, in preference to playing the highly structured (and strictly linear) missions that comprise the game’s actual storyline. It’s disappointing that, in the game’s most recent incarnation, the developers have made no effort to more tightly integrate the story with the more natural flow of “life in the city”. I’m confident that will be the next step in the evolution of such games.
It’s interesting that all this stuff has come up in the world of mainstream games just now, when I’ve been praying for years that we’d get some games which paid a little more attention to a truly interactive narrative. As someone who’s just as attached to action games as I am to IF, the next year or two should hopefully be an exciting time in gaming.
One wonders how many times this “issue” will emerge seemingly de novo. As someone who came to it two years ago thinking I was doing something new, then realized that I was already late to the party, I think it may be a function of the very slow build to a critical mass of people who have actually read the stuff others have written–or, to put it another way, of people in gaming culture who have the “grad student” instinct.
We’ll get there, but it does seem to be taking a bit longer than one thought it would.
Part of the trick is that some of the proposed solutions are very hard. Drama management of a large number of tiny elements requires both
a) that you have the right algorithm for managing your drama and also
b) that you create a massive quantity of content for the algorithm to manipulate.
That being so, experiments are risky and expensive (which discourages commercial companies from pursuing them to start with); then, when someone does do something, the technique chosen doesn’t have a lot of prior art to draw on, and seems novel even if there has been plenty of prior discussion. And the outcomes are hard to analyze. When you look at something that doesn’t quite gel into an interesting story (and I think Façade is not reliable in that regard, for instance), then which of several aspects should you blame for the failure?