Yesterday I've been at the IGDA meeting - the International Game Developers Association - where Katherine Isbister, the author of the book Better Game Characters by Design: A Psychological Approach, gave a lecture about the importance of emotions in games to reach a wider audience.
In fact, todays challange of the game industry is to make gamers cry by the emotional experience of the game, as it's usual for film makers or authors to give the their consumer an emotional experience.
The idea behind the book is, technics change but humans don't - well, at least almost. Upon this conclusion, game designers bear responsability of how to make the player identify with the game, and what emotions the game characters, style, setting, and control will cause.
The main problem is to master the so called zombie line, the effect of having soulless and robotic characters. The key to this problem is a better psychological approach in design. The idea goes so far, that mastering this will create new genres of games.
You may agree, stories and movies are more interesting with well designed and interesting characters, so it is for games. In deed, modern games by the industry follow this approach, as GTA is thrilling with story, characters and setting, as Nintendo DS & Wii allow new experience by their controls, or as severel games offer the option to completely design the character by the player, which goes so far that it's even possible to make a virtual mirror image of the player, what leads to self identification and represantation in a virtual world.
For more information, read their blog about Game Empathy.