If we judge success over the long term, it doesn't look like video games will last. But why not?
First it's useful to look at other media that tried but have ultimately failed to thrive as narrative forms. TV shows have been mostly a bust, again judged long-term. Aside from the serial dramas Twin Peaks and Mad Men (safe call for long-term recognition), hardly any of it holds up, in the sense of people will still want to watch the episodes in re-runs or for the first time decades later. I would add sit-coms like The Simpsons and Seinfeld, but comedies generally don't last very long. Give them another 10 years, and they could be as faintly remembered as All in the Family, another great sit-com.
Narrative radio programs have not lasted either. No one goes back and listens to the originals, or bothers re-interpreting them with contemporary actors. Judging from the ratings estimates, as well as children of radio's heyday telling their stories, the death of radio narratives was almost instantaneous once TV came along.
Also gone are serial short films that you'd see as part of an afternoon of movie-going. They didn't even last through the 1960s. George Lucas may have been inspired by some of the adventure serials when he thought up Star Wars and Indiana Jones, but now we're talking feature films. The first Star Wars movie is nearly 35 years old and continues to absorb audiences, whereas the Flash Gordon serial from 1936 was not still captivating viewers in 1971.
Last, and probably most relevant to video games, are comic books, intended more for a younger audience. As with serial films, some of the characters and related stories have achieved lasting fame when they were turned into movies. Still, few read comic books anymore, let alone the classic ones.
There are a bunch of others -- dime novels, penny dreadfuls, etc. -- but you get the idea.
Which narrative forms have worked? Epics, sagas, tale cycles, folktales (including urban legends and fairy tales), plays, frame tales (harder to pull off), novels, movies... maybe a few others that I'm forgetting.
Right away we see it has nothing to do with ancient vs. modern. Novels and movies are both very new, yet they've caught on for good.
The main difference is how interruptible the narrative is. We want to get absorbed in the story, shut off our self-consciousness, lose track of time, and enter a dreamlike state. Every interruption that jars us awake from the dream ruins the experience. We might give a new medium the benefit of the doubt for awhile, or ride the fashion wave while it lasts. Ultimately, though, if it is too easily interrupted, future generations won't put up with it.
The most successful media offer you an experience that you can take in during one sitting, probably not more than a few hours, like plays, movies, and oral folklore. Even the longer forms can usually be broken up into several coherent chunks without feeling like the dream has been interrupted. You might read a novel in a few sittings, or watch the Star Wars trilogy on separate occasions (as you had to when they first came out).
The chunks of an epic or novel are coherent and nourishing enough that you don't feel like you were just about to get to something good and then -- oh no, tune in next week to see how it all turns out! No one appreciates a culture-maker who keeps on giving the audience blue balls, some cold lab scientist who keeps them running tired on a treadmill for weeks on end. Imagine if you had to wake up and fall back asleep 10 times in a night just to finish a single dream! The chunks of a larger successful medium are more like several fluid, completed dreams over the course of several nights.
Watching TV shows when they air is the worst because there's two fractal layers of interruptions -- the week between episodes, but then even within an episode, all the fucking commercials.
With that big picture in mind, what does the fate look like for video games? They'll probably go the way of comic books and thriller dramas on radio. I never got into narrative video games, but I do keep in touch with what direction the video game world is going. By now you're lucky if a narrative video game only takes 15 hours to complete, and it's easy for them to last 20, 40, or 60 hours. This new Skyrim game that everyone is crazy for can provide them with more than 100 hours of gameplay before the story is over.
At that large of a scale, kiss the narrative good night. Even a long novel, say an 800-page Gothic novel, with 250 words per page, would have about 200,000 words. At the slowest typical reading rate (for comprehension), or 200 words per minute, it would only take 16-17 hours to read. A 300-page novel read by someone on the faster side, at 400 words per minute, would go even faster at just over 3 hours.
Once you get to 20, 40, 60 hours to complete the narrative, now you're into TV and comic book territory. It's not just a handful of chunks that hang together in a gestalt, and experienced over a few days. Now we're talking dozens of chunks experienced over a week or more (aside from real weirdos who would finish a 40-hour game in two 20-hour marathons).
I liked video games best when they didn't have any narrative pretensions at all -- you're some good guy, a bad guy is causing some kind of trouble, now go stop him. Who cares beyond that, we just wanted to have some pointless fun for an hour or so. Now everyone is so obsessed with the story, no matter how lame. Even the not-so-story-driven games like the first-person-shooters: googling "call of duty" "spoiler alert" gets over a million results.
To end with, I know some video game addicts are going to geek out in the comments about how the narrative games have only gotten more and more popular, how they're here to stay, etc. But just remember that people said that about penny dreadfuls, comic books, serial films, radio dramas, and the rest. They kept getting more and more popular, until they evaporated. Given that narrative video games are much closer to the serial media than to the more concentrated, digestible media, their long-term fate looks pretty bleak.