Emergent narrative is the answer. This is when the player creates their own story through the use of the gameplay mechanics that the title provides them with. Open-world or sandbox games provide the best examples of this, as do games that are essentially simulations.
“I followed the hooker down the alley and set her on fire with a Molotov cocktail. But a witness tried to call the police, so I stabbed him.” – Grand Theft Auto.
“I pick-pocketed the old man, but felt guilty because he only had 2 Gold, so I gave it away to a beggar” – Oblivion
“I was too busy cooking breakfast for my wife to make up for our argument last night, so I was late for work again and lost my job” – The Sims

I was too busy courting bearded ladies to learn how to use the oven...
These stories are not pre-scripted and the player is not forced to make any ‘Option A or Option B” choices. Although the player has almost complete freedom of choice in these situations, there are still limiting factors; these being the game mechanics and the Artificial Intelligence of non-player characters. Although AI in games is becoming increasingly more complex, currently AI characters still have a much more limited range of reactions than a human player.
This is where online gaming comes in. The added variable of the unpredictability of other human beings vastly increases the number of possible situations. Each of these situations is another story. The choices that the player can make (and the tales that can unfold) are now limited only by the mechanics of each particular game.
Clearly there are Massively Multiplayer Online games out there that are making progress in this direction already and virtual worlds such as Second Life are approaching reality in terms of the opportunities that they offer to the player, but there is still much work to be done.
Of course I am not suggesting doing away with more traditional and single-player game-types. Another of gaming’s strengths as an artistic medium is its diversity, and it’s sometimes nice not to have to make choices and to simply watch a story unfold before you.
Cinematic and immersive games like the Half-Life’s and Metal Gear Solid’s of the gaming world can still provide fantastic experiences for the player, but for gaming to really reach its full potential to give every player a unique, personalised and truly interactive experience, we need to see more online titles whose game mechanics give players true freedom.
Picture that cave again. Only this time we’re in a game. You can choose to listen to the story being told, you can run outside, you can fall asleep, you can murder everyone around you, or you can begin to tell your own tale… The possibilities are endless…