I find games that do this are far more boring. Rockstar create by a million miles the best characters in video games. They all have unique vernaculars, mannerisms, personalities and cultural identities. I love mass effect and fallout, but their characters are dull and monotonous in comparison. It feels as though they have one single dialogue writer who writes all the lines in his own voice. Rockstar games seem to have every characters dialogue written by a different person and put a huge effort into refining their uniqueness and making them cohesive and interesting.
And camera direction is a lot better than constant first person view. There's a reason films don't just use a single camera shot per scene. Story segments in mass effect and fallout have horrible direction, and everyone just stands about and you only see their face. In rockstar games they're far more realistic in animations and the camera direction makes the scenes far more interesting to watch. People seem to live in the world. Fallout does this well outside of conversations but mass effect does not. In Rockstar games instead of standing still having conversations with people, you listen to the conversations while travelling which is infinitely more enjoyable. Either that or you watch a well directed short cutscene. I don't have the patience to listen to dialogue in me/fo when I can read the conversations and skip the dialogue 5 times faster. This leads to those characters having less personality and memorability. The dialogue becomes a minigame and gets treated as a game rather than being payed attention to cognitively as the story telling deserves.
I really hate that Gordon Freeman is so heavily cited as a good character, when he's not a character at all. He's an empty shell. I don't think it's done out of artistic integrity, I think it's just easier to create a perfect game when no one can see any flaws in your protagonist and companies like valve take advantage of this.
"It allows moral choices to make more sense in games, if you are a dude you create then your choices make more sense rather than you being a preset hero who saves the world but occasionally murders kittens. That's the theory anyway. Since we don't exactly have the whole moral choice thing down then it rings kind of hollow."
There are definitely benefits of both types. But I love how in GTAIV and it's DLC, I acted on the moral impetus of the defined character, and it changed how I played the game. With Nico I cared about people and just wanted to make a life for myself without harming anyone unnecessarily. With Luis I was a psychopath who ran over pedestrians for fun. With Jonny I didn't care whether I helped people or hurt them, I just looked out for myself. No other game has made me make moral decisions based on anything other than what was most fun or what I would do myself. That's the beauty of role playing, it allows you to be someone else and feel what that's like. The game didn't allow you to do what you would want, but that's not a flaw, it's a deliberate storytelling choice and one that makes a more cohesive game.