Interactive Narrative

For my 'Game Studies' class, I am looking into the game genre of the interactive narrative. What these games usually encompass is that they are titles whose storyline changes shape or form depending on the player's actual actions while in the game, and through their interactions with characters and NPCs. I've been reading the book "Pause and Effect: The art of the Interactive Narrative" (by Mark Meadows) and it has been a really interesting project so far. The evolution of this particular genre (and the 'AI' as well) has advanced so quickly it boggles my mind. Moving from chatterbot programs like ELIZA (which was made in the 1960s) to games like Facade, Mass Effect and Heavy Rain, even the visuals have moved leaps and bounds giving us very realistic characters to interact with. It makes me wonder what the future holds for this type of genre...