Here we come again, game designers talking about the necessity to take into account the user/player. I believe here we should have thought about that long time ago.
Human-computer interaction science says that we must think about the user, we most develop within design user-centred approach.
At the same time if we look at the film industry, as Hollywood, the viewer has always been king, deciding who the good producers, directors, artists...are
So games should have done the same, at least we see people saying "mea culpa". Peter Molyneux is saying now "We've Failed.. we've done a poor job on engagement". Peter Molyneux believes now that we need to accomplish a simple objective:
have players caring about characters in games
At the same time and during GDC 2007, he talked about the next Fable 2 and what it seems to be a magnificent new character, an AI dog friend, that put me thinking about Yorda. See an overview of the presentation at Escapist forums.