The video above is a demo of Disney Research Center's work into creating true interactivity in video games. A recently released paper from the center describes what they're doing:
We want interactive narratives to be an immersive experience in which users can influence the action or even create a storyline, but the complexity of the authoring task has worked against our ambitions. Our method of modeling multiple story arcs and resolving conflicts in the storylines makes it feasible to author interactive experiences that are free form, rather than constricted.
Most games suffer from limitations to interactivty that mean a story arc can only have a certain number of outcomes before creating them becomes too complex. Disney Research is trying to eliminate those limitations using interactive behavior trees (IBT) that keep track of user interactions and fill in inconsistency gaps so that creators don't have to: "These automated tools empower the author to focus on storytelling, rather than worry about resolving every possible conflict as the many story arcs intersect." In the example shown in the video demo, if one bear is supposed to throw the ball to the other, but doesn't have a ball to throw, the IBT lets the bear retreive one without the creator having to specify that action taking place. Pretty neat!
If you're interested, take a look at the paper here.