Storys are great. Providing you've got a good story to tell. As David said. Films suffer from bad stories alot, how many terrible films have there been? Wolverine, terminator salvation, and dragonball evolution, all spring to mind. As games become more realistic, as motion capture technology, and animators become more sophistiated with real time technology, and gain access to faster and faster hardware, it's not supprising the line between games and films will start to blurr.
Upon saying that, it's not the only way to write a game, even for the next few generations. MMO's largely offer very limited stories. The generated quests are repetitive, the story doesn't really evolve at a speed that anyone recognises. And they don't really take you anywhere. Take Eve Online for example, there's almost no story there at all. There's alot of fiction written around it, but it's much like Elite First Encounters newspaper system, something you read online, yet never really interact with in any meaningful way. It's not really a part of the game, and doesn't really affect any but the most envolved players.
The reward for MMO's is reward of leveling up, as well as the interaction between friends, and other users online.
Also remember that the whole story line buisness also doesn't apply to smaller games. Most people would think, I expect, that there's no such thing. Which isn't true, mobile devices such as the iPhone, Nokia, and Windows mobile based phones are all powerful enough to play the sort of games we where playing a decade ago. But the nature of these devices is different. You're not sat in front of a dedicated TV, console and PC. The best kind of games for these devices are not epic storyline driven games. But puzzle games, card games, social games. Games like worms are ideal on the platform and highly addictive simply because you don't get so involved, you pick up an iPod touch, load it up, have fun playing it, drop it into your pocket again and carry on doing whatever you where doing. So for causal, play in a lunch time, on the bus, or while waiting for someone in the pub, storylines are not always that appealing.
Games are not limited to consoles and computers anymore, they expand a wide range of products. The new Kindle DX supports apps now, I image there will be an emerging market there. Which is great for indie developers like me, because we're back to bedroom coding. All I need is a bright idea, a computer, and a programming language.
So really we have two generations of games on the market at the same time. Those for portable devices, and those for dedicated devices. Upon saying that, theres a medium I failed to mention. Web browser games are also extremely popular and often benefit from alternative revenues such as advertizing. These are great for the office worker lunchtime crowds, who just want to play something while choaking something down. I remember my Boss back in 2000 sitting there in front of the computer addicted to a simple marble game, a grid, different colours and he had to make combinations to win.
So it's important not to apply a hard and fast rule to all markets. My company makes a good profit catering to the iPhone, and we don't do it with complicated in depth stories.