The Guild 2: Renaissance", a game that can be best described as a life simulator. You pick a class like "scholar" or "craftsman" or "rogue" and try to make a living in a medieval European setting. It's dependent on one of the major concepts I've talked about in the past - individual businesses contributing to a larger economy. Your role is to buy cheap and sell dear whenever possible (unless you are a rogue, in which case your role is to skim off of the rest of society without being caught). Even personal things like romance and marriage can be thought of as means to this goal, through having children and making family connections.
As believable and logical as this concept feels, it was ultimately unsatisfying. I enjoy a lot of "mundane" games like city sims, so this was kind of surprising. It simply felt like there wasn't enough to do; it was "work" without the immersion or choice necessary to round it out. There was no excitement to it, it was just a grind. It burned me out before I had a chance to really get attached to it. I had a similar experience with Mount & Blade, but that was after a huge amount of playing, after I'd been "on top" for a while and it was really just an unending battle to keep my position. With The Guild 2, it felt like that pretty much from the start, even before I'd started actually making money.
This can be connected to a combination of personal attachment and player motivation. In mundane games, the player's goals are generally based on simple goalposts: own a business, get married, have a child, own a city, and so on. In other games, it's more directed, and the player can sort of hitch along for the ride: defeat enemies, take their stuff. The player might not care about it as much, but it's something for them to do, and they can be caught up in it. Giving players the choice to do anything can be rewarding if an individual is sufficiently motivated, but it's also got no safety net if they don't want to do anything - it gives them no natural direction to go in, and so they gravitate towards concepts like building a house and raising a family because those are things you can't normally do.
However, mundane goals can fall short because they are generally the same goals that one has in real life, except in simulation form. In games like Fable, for example, it's possible to get married, buy a house, and start a family, but there's very little interaction possible so it all feels very shallow and simplistic. Other games, like Mass Effect or Dragon Age, have more in-depth romance concepts, but they also tend to feel shallow after a while because it's not real interaction, it's just picking choices and getting canned responses. It's the kind of stuff that would be great in real life, but as presented in a game (a limited medium reliant on pre-fabricated conversations) it seems pointless.
In essence, games tend to be about the journey, more than the destination. When the destination is reached, the game is over, and yet there must be a destination so the player feels that on some level there is a reason to keep doing things. This is one of the reasons I felt Mount and Blade was fun until I'd beaten it: there was always something new to do, something to improve upon, some new concept to interact with. I was psyched when I captured my first city and strolled through the streets knowing that they were my streets, but by the fifth one I couldn't have cared less. Once I'd beaten it, there were no rewards. In real life, of course, a rich man has all sorts of tangible benefits to play with, but perhaps even those become boring after a time. In a game, "marking off the accomplishment" is all you can really do, because actually having the thing isn't that great.
Does this mean that things like realism are necessarily bad or inadequate? I would say no, because I don't think doing these things in a fantastic setting would help, either. Instead, it comes down to elements that are universal, and that people tend to identify with. I'm going to identify three concepts that I think are important regardless of setting, genre, or method: objectives, advancement, and emotion.
Objectives: What You're Doing, And Why You're Doing It.
An objective varies in composition. It can range from a very linear and direct "go here and do this" concept, to an overarching "defeat the major evil through whatever means you see fit" goal, to the essential non-objective of "do whatever you feel like doing". In this case, the real goal of an objective is to keep the player focused on the game. Like any media, games need to fundamentally hide the fact that they are fiction in order for the player to get immersed and really care about what's happening. Objectives provide a way to do that - the player is so busy thinking about the character's motivation that they can essentially latch onto it. By doing so, they avoid the fact that their own goals (as hedonistic as they usually are) cannot be fully expressed in terms of game content.
This is a major roleplaying concept. A proper objective can mean the difference between "yes, this is something I want to do" and "well, why bother, it's not like I personally have any stake in this". The player and the character fight for drastically different reasons, because the character has much more stake in what's going on. It's a concept of player/character separation: the player must be content that the character has achieved their goals, regardless of what those goals are, because they themselves are not going to benefit in the same way (nor suffer for failure). The barrier of a character-based objective, rather than a player-based objective, can be helpful in maintaining the veil of plausibility that keeps things feeling "real".
Advancement: Novel Stimuli For The Player
This is a concept that can be split into two types: "new content" and "moving the story along". New content is easy to understand - you level up, you get new powers to play with and new gear to wear. It brings things in so it doesn't get old or boring for the player, and offers upgrades in a way that gives them some time to get bored of it before a new one shows up. It's not just "shiny things to look at", it's also new tools to work with, and it expands the game. Of course, some games don't bother with that second part, and turn into an unending grind of higher numbers to deal with the same foes (that also now have higher numbers). The important part here is to actually give a sense of movement so the player feels like they are doing something and it stays interesting. If the game becomes stagnant, the player will not strive to do things in order to basically stay in the same place.
Story advancement is similar, but subtly different. It's the same basic principle ("something's happening, I'm not just running on a treadmill here"), but rather than pretty things to look at and bigger swords to hit things with, which are largely issues of player concern, it's more about the idea that the character's actions (and hence the player's actions) are having some effect on the world. I wouldn't play a perpetual X-COM game, for example - my attachment to the characters hinges entirely on the idea that at some point we will be able to defeat the bad guys. The same goes for a lot of games, and this ties into the issue of an objective: part of advancement is the idea that there is an objective to COMPLETE. Not just "participate in", but soundly resolve. When games go beyond that, they tend to drag, because a game cannot adequately explore the spoils of victory in the same way that real life can.
Emotion: Investment And "The Veil Of Fiction"
Ultimately, "emotion" is the key point of every part of fiction. Emotion is what separates rules and systems from the attempt to create a fictional world. Chess is certainly fine as a game, but to make it immersive it would be reliant on the emotions and associations of the characters - the fear of the pawn being crushed by the rook, the thrill of the knight smashing the bishop, the overbearing dominance of the queen over the whole board. Of course, these things are rarely depicted in chess, which is why it largely remains a calm, purely tactical game - except where the player's emotions are involved.
Essentially, emotion is what "sweeps up" a player. A player can think that a universe is neat or well-designed, but it is emotion that makes them a part of it. To get psychological for a minute, there's plenty of research about emotional mimicry and sympathetic responses even for fiction. The emotional response is so strong that for a minute the player's body (and hence the player) forgets that it is fiction, and is drawn to care about it anyways. This is why suspension of disbelief is so important: because emotion creates the subconscious idea that this isn't fiction, and to care about events the player needs to nurture and support that idea.
Obviously, this isn't limited to fiction. A good piece of music can induce emotions, too, whether it's excitement or rage or tranquility. The point is that it's a largely subconscious response that the audience allows themselves to be overwhelmed by. This is the heart of immersion: to create a solid, airtight bubble of emotional manipulation that provides emotional responses even in a situation where they are not "warranted", per se. The goal of a horror movie is to terrify the audience even though they are not at risk. The goal of a romance movie is to gain the audience's sympathy even though it's actors on a screen. The goal of a heroic action movie is to pump the audience up and get their blood boiling even though none of it's real.
In game terms, there are plenty of games that try to sweep the player up in what's going on. Games, like movies, are rarely content to "let things be", as it were, and more likely to use music and acting to convey a more solid sense of emotion to provoke the desired effect in the audience. On the other hand, even games that don't (or can't) do this can create emotional responses through the player's imagination (such as X-COM or any other game where you have the opportunity to become attached to generic, semi-disposable characters). This needs to tie into objectives and advancement, though: nobody's going to get emotionally attached if they don't think they're accomplishing anything, or if their battles are going to go on for eternity.
Analysis: "The Guild 2"
With these elements established, let's look back at The Guild 2. I think the reason I disliked it is that it didn't connect on any of those three concepts. Obviously I'm not trying to say that it's a bad game or that it's impossible to like, I'm just analyzing why it felt boring and simplified to me despite being very detailed and intense.
The objectives of The Guild 2 are "survive" and "profit". It may seem like a scenario with barely any objectives (the free-form "do what you want"), but those are both clearly established as being objectives. The problem is that it's the kind of stuff that I do in other games to supplement the main gameplay. The goal is to make money, but there's nothing really to spend the money on other than making more money. There's no ideological or hedonistic reason to pursue wealth - it's just the point of the game.
One thing I didn't get out of The Guild 2 was a sense of improvement. Now, to be fair, the game is about moving up from a single entrepreneur to a massive dynasty, but it never felt like real landmarks. You start the game being able to put down any business in your class, and then as the game progresses you upgrade them. However, these upgrades don't feel particularly noteworthy - there's no sense of "Yes, I've finally reached that landmark", it's just more income.
The main source of emotion in the game, in my opinion, is found in courtship. However, even this tends to be very dry and simplified. The rest of the game's "emotion" is more about morale than a real drive to succeed - even the game's combat (armed thugs, bandits, and hostile takeovers) lack a sense of drama. The problem with this isn't just that there isn't emotion, but that the audience can see there isn't emotion, and that prevents us from filling in those gaps using our imagination. If it was just like "a bandit convoy seized some goods" then we could imagine the blanks being filled in, but because it's fully depicted in a lackluster or limited way, there's no room to do that.
So, To Sum Up
1) A game needs to keep the player preoccupied through emotional attachment in order to maintain the idea that what's happening is important.
2) A game that fails to make that connection, or that has a stagnant story, cannot support such a concept.
3) A game with no direction falls prey to the fact that doing mundane things has less payoff in a game than in real life, which points out the fictitious nature of the game.
4) The veil of fiction must be maintained in order to elicit the emotional responses that cause player attachment.