Lore in my opinion was always the driving factor of any RPG game. It pulls you in, makes you love the characters and follow the plight of the world around you. It is the cornerstone that all RPG whether mmo or platform should be building their games on, but to me it seems this is becoming less relevant then putting out the next big hype.
I will mention games I have played, starting with EQ. Gods were a large part of the story, and the races and who hated who. The game actually seemed to be built around the story, not the story built around the game. As a Dark Elf you were hated by many races including humans, and couldn't enter their cities without being killed, but as far as RPG goes, that is exactly how it should be. You want to enter that Freeport (human city)? You make ammends with them. Dark Elves killed a lot of orcs and brought orc belts to the captain of the guard in Freeport to gain that faction so they could walk freely in the city. However you didn't have full run of the city, you still had to watch out for certain factions within the city. Freeport merchants, Freeport Guards, Freeport Wizards (Can't remember the wizard faction). You had to build your trust up, and for good reason, the Dark Elves were an evil race that did bad things and going into the story you knew that. Your lore started almost from day 1.
EQ2 built upon eq1 obviously, but even then it seemed to diverge and make the story more generic in some aspects. Unifying the races, picking an evil side or good side rather then a god to worship and your faction based on race.
WoW had its lore that it built on, even if the game ruined the mmo community (not saying the game itself was bad, but the community is horrid). It was rich in history and the places you go have a story, and to be honest I think that can be attributed to its success more then anything else. You may fight the urge to resist it, but its there.
I also think IP's (Conan, SWG, etc) are bad for lore as well. It seems to me, it would be very limiting in what you can do and say. IMO these games are targeting a fan base and are good for those who make them for a quick buck. The lore is mostly known, and breaking away from it will piss the people off that follow those stories closely and sticking with the story will push away people that want some new kind of spin. Not to mention it's not very creative, if you have the know how to develop a game, why not come up with something new. Or at the very least put your game a thousand years in the future after the story lines, and build the world based on what changed and give people that new twist, and some crazy lore about how Luke Skywalker went to the darkside in his later years, and in the conflicts that followed was directly responsible for his sister dying. He lived on for a thousand years and is now part cyborg, and practically a god.
It seems now though that games are moving away from designing lore first, sure they give a story, and some background. However its not in your face from the very beginning, and you can tell that large parts of the game are unfinished because of it. Towns, npcs, quests, and items aside, if it has no background to me its a two dimensional place with no purpose.
I still play Vanguard, and I love the game, despite its problems. It is a beautiful game, with so much to work with, but its lore was broken from the beginning. Its got all these races and factions and stuff seems incoherent, and out of place, and to me more then anything else, is the most disappointing thing about VG.
A great game will stand out because the lore will pull you in. You step into the game for the first time, and bam its in your face. A dark elf defending his city from a race of high elves that think they are an abomination, and want to wipe them off the planet. Your god imbues you with strength to withstand the the incoming army. Or (VG reference) A dwarf getting his first mission to patrol the paths at night, with hordes of skeletons roaming the night, invading your homelands. Your people making their final stand in their greatest fortress, but even their numbers can't hold out for ever against an army of undead. You get jumped by 10 skeletons and up rides a Dwarf Paladin on (his warthog, stupid f'n racial mounts) and hacks them down saving your soul from damnation, his armor emanating with the protection of his god.
I just think its time that games start actually building their games by designing lore, and adding what makes sense and cutting the rest. Building on those stories and stop throwing crap in willy nilly, which helps nothing. Concentrate less on massive amounts of crappy content, and sticking with a story line full of rich, complete, and fulfilling content. At the end of a lore driven quest line, giving a great item that you can show off and people will be like he worked hard to get that and learned alot about his people along the way, (or another race if he was helping them out). Stick to your guns when it comes to faction, if two races hate each, make damn sure they can't go into each other's city without working hard to do so.
I think subconsciously people follow good story lines and want to see the end of the quest lines, and when they have these quests with, kill me 100 worms, they start to become withdrawn from the game rather then be immersed. I honestly believe this can be a suboncscious push to quit the game, instead of being invested in your character and advancement within the game.
Just some thoughts on an issue thats been bothering me lately. Also, I am not an RP'r, I just like a good story, and background to what I am doing in game and why I am doing it.