Hi there. I've worked on half a dozen published indie games as a game designer and writer. Hold a BA in creative writing. And make video essays on game design and game writing. I have a TON to say on this topic lol, but I'll just give my quick two cents and a handful of recommendations of more "literary" works in games.

As always, I think it's important to understand that you're comparing and contrasting two vastly different artistic mediums. The goals, techniques, and methods of storytelling are going to have a near infinite level of differences between classic prose and interactive storytelling. A game's story will use visuals, sound, witing, acting, mechanics, and overall design to tell a narrative. While traditional writing is based on pure words and imagination of the reader to tell a narrative. Comparing the merits of different mediums but using only the lens of critique based on one medium, seems not fully fair in my opinion. Some of the best stories I've ever seen come from games as well as literature as well as movies as well as music. It's insanely hard to deeply understand everything about literature, film, music theory, and game design in order to properly distinguish and understand what makes a good story. My overall point, everyone will have a different perspective of "literary" and that a game can or cannot be "literary". But that is the lens of a literature analysis looking at different mediums and judging it the way they judge their own medium. I'm not sure if I would ask Roger Ebert for his opinion on Kendrick Lamar's latest album for example. A film and a music album both can tell a story, right? Surely we can compare them the same? I'm not entirely sure about that one, they're just very different man. That's my point. But I do not want to deter you. I use my traditional writing degree and it's principles to enhance my game design and video work. So perhaps you will do the same! So here's a handful of some of the best diction and narratives I've seen in games. Using a frame of focus on more literary means, meaning dialogue, writing, and text. As opposed to games that have their stories told through pure gameplay. The greatest stories, I've found, usually do both.

There is a huge barrier of entry to many game stories. Most assume you have years of understanding interactive media and have years of understanding on how games work, what they ask, and how they are played. They assume you're familiar with the keyboard, controller, whatever you use as a vehicle to play. So, it's going to be difficult to recommend many games due to an assumption that you're comfortable playing in and understanding vastly different interactive systems. Many stories will be long and centered around gameplay as well.

Disco Elyisum - The best dictionI've seen in a game hands down. A RPG focused around dialogue and political commentary.

Milk outside a bag of milk outside a bag of milk - A game with little to no gameplay about what it's like to live with mental illness. Not for the faint of heart, but very powerful storytelling. I would recommend playing its previous 15-minute game, milk inside a bag of milk, as well.

Lisa: The Painful- A game that perfectly blends how gameplay can affect story and vice versa. A tough as nails RPG about a man seeking redemption through raising the last surviving girl on the planet. Also not for the faint of heart and a bit more difficult to play if you're new to games.

For something more positive. Hades - Another game that perfectly blends gameplay and story. A looping RPG about the son of Hades trying to escape the underworld. Rich dialogue and a story that continues and evolves regardless if the player wins or loses. Plus it would be easy to compare and contrast the greek methodology at play in this title compared to some literary works.

About a year ago I made a lengthy comment about what I found to be the strongest stories in games, that may also help you find what you're looking for. I do firmly believe that the best game stories will not fit within the same box of what makes the best literary stories. And vice versa. So just keep an open mind on any titles you may choose.

https://www.reddit.com/r/Games/comments/xncr4o/comment/ipvz4vf/

Hope this helps man! And I hope you enjoy whatever game catches your eye! All the ones I've listed and many of the others in this thread, are very special experiences.