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For those who still fail to comprehend the truth of the matter, consider the extremes.

Imagine something that is 100% uninteractive. In that situation, the storyteller can decide every single thing the characters in the story do -- he can decide what they are, who they are, why they are, where they are, when they are, and what they do. That is pure storytelling. Examples of this include movies and books.

Now imagine something that is completely 100% interactive, where the audience gets to decide all of the above mentioned criteria. Obviously the storyteller can't tell a story in that case, because he doesn't decide anything. All interactions are made by the audience instead. There's effectively no real world examples of this, although Second Life comes close, and one might say "your imagination" is an acceptable answer, too. 

Games today are incredibly, amazingly limited. Even morrowind. Even Oblivion. Even The Sims (Which I actually believe is the most open ended game in existance today). The number of actions you have is amazingly limited (in most games it's usually limited to "kill it" or "have a predefined conversation with it"), the number of things you can be is limited, and the location is almost always fixed for you. People don't really understand what true interactivity means, because we're so distanced from it by these incredibly linear games. 



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