The Medium Problem
Removing a story from its natural medium, in many cases, is a waste of a perfectly good story. Though there are a few exceptions, in general, ripping a story from its original format tarnishes the experience. Gamers may know this lesson even better than the most cynical book lover. Just the same, it seems like a videogame is optioned for a movie adaptation every other week. This past Tuesday's showing of a live action snippet of a possible Halo movie did nothing to alleviate my frustration; though it was well put together, it had the ambiance of a fan-film set in the world of the Alien movies.
When a movie based on a decades-old cartoon made to shill toys can be great in its own right, I can still have hope for movies based off of video games. The real problem is that most movies suck. Therefore, most movies based on games must inevitably suck. The only difference is that, because they have a built in audience (gamers) they get pushed through production, promoted, released, and we actually go see them. That's why we really notice the terrible movies the 'genre' has created.
I would bet if we were to look at other related genres (horror and action come to mind) we'd see a similar relative amount of suck. Turn on Sci-Fi at 3AM, or TNT during their Steven Segal weekends for an example :P
That said, games often do form the basis for respectable novels, though they may not be great literary works. I just recently finished the novelization/prequel to Mass Effect, and found it to be a pretty decent 'space opera' novel. Sure, it's a setup/tie-in, but it was just as good as the average novel you'd find in the science fiction section.