This is one of the things which has recently come to my attention regarding games, and it really fascinates me. Take a book, or a film: the plot starts at the beginning, progresses throughout the duration of the work, and then finishes. Obviously, it will always happen in that way: no matter how many times you read Hamlet, it will always end the same way.
The thing which really strikes me is that games, for the most part, do this as well. Most FPSs are very linear: the story begins at point A and moves to point B and so on. You can control how you go about shooting people, and sometimes there will be different branches to go down (ie. go in guns blazing, or choose the stealthy option?) but for the most part, the story is pre-written, like a book. RPGs are better - Fallout 3 particularly - but they mostly boil down to one big quest which works on the same principle of a predetermined plot, maybe with a choice at the end (which is mostly quite crude in the "save the babies or eat them?" black-and-white good-and-evil sense).
But there's no reason why games should conform to these models (apart from the fact that they're easier to make this way, and they will probably sell better). Games are the most interactive art form which humans have yet created, and I think it's a shame we haven't exploited that more. Take, for example, Facade:
[Edit: the link doesn't seem to want to get hypertextised, so you'll have to copy it into your address bar]
http://en.wikipedia.org/wiki/Fa%C3%A7ade_%28interactive_story%29
In this game, you are a guest in a couple's flat; they are on the brink of breaking up. The AI is, broadly speaking, very flexible, which means there are many, many different paths which you can take, and many actions you can perform. In a sense, you have freedom.
But I'm not completely happy with it as a prototype for the "perfect game", because although you have freedom, I still felt strongly compelled to help these people work through their relationship problems and get back together. Once I'd done that, my "freedom" was basically squandered on going round kissing both characters until I got kicked out of their flat, just for fun.
The problem, I think, is that only one storyline has "worth" in that game (from my point of view anyway): the storyline where they get back together. In a book or film, there is only one storyline but it is imbued with worth due to the fact that it's been crafted by someone. Conversely, while certain RPGs like Fallout 3 or WoW allow you a lot of freedom, any stories which are unique to your experience will only be a part of *your* experience: if you narrowly survive an overwhelming attack by super mutants through some miraculous happenstance, it will only be relevant to you and will, ultimately, be meaningless in the wider context of the game because there is no higher power (ie. the storyteller) to give it worth. If such an event were to occur in a book, it might be symbolic of the fact the character is protected by the gods, or a sympton of their superhuman qualities, or a comment on the randomness and unpredictability of life; but in Fallout 3, it will always remain nothing but an anecdote.
What I think might work is to pursue a choose-your-own-adventure style of a game with options, but give so many options and give each option such meaning and such symbolism that the game, whichever paths you take, is ultimately meaningful. Rather than the game behaving like a straight line (as does a book) it would behave more like a spider diagram, or the splinter-marks that appear when a hammer cracks ice, the game beginning at the epicentre of the hammer-stroke.
This game would be a sort of "idea space", I think: since nothing would be set down for certain, one might get a sense (with multiple playthroughs) of an atmosphere of an idea, rather than a concrete plot. If, for example, there was a character who held a certain philosophy like hedonism or solipsism, they would reappear in different lights in different playthroughs, which would allow the player to see them from different angles and get a feel for (but not a definite narrative of) that character.
Of course, this game would sell phenomenally badly and would, by its very nature, be difficult to produce. But I for one would like to see it.
Apologies for the long post!
Secretary of Unknowable Knowledge for the Rock/Dink administration '08