Is there really a superior format to telling a story? Or is that an unfounded notion?
Then what challenges do video games face in storytelling? For one, video games have to tailor a plot that allows for gameplay in the first place. It is expected by everyone that at some point we'll either be in the middle of a battle and fighting people through various methods, or running around, jumping on platforms, exploring all areas to find out where we need to go next. This ultimately puts a limit on the kinds of stories that can be told. The main protagonist will ultimately be involved with some sort of confrontation that leads to battle, and either by magic, weapons, or even fisticuffs, they will resolve the issue with one or more of those, and this will happen several times throughout the story.
This also leads to another issue with storytelling in video games, and that's the length of the game. We all expect to put in an average of 8-10 hours at the least in one game, excluding any DLC to add to the experience. If it cuts any shorter, some may get upset with the length and feel that the money just isn't worth it unless it was sold at a reduced price. Or some would just simply want more and ponder ways the experience could be lengthened. With longer experiences in games than the 2-hour average that films usually hover around, stories in video games run the risk of plot points being stretched out over time, causing the flow of the story to feel quite stagnant. The flow of video games usually falls under a rather simple pattern - action, plot point, action, plot point, action... The pattern repeats until the end of the game, with some breaks between to slow the pace down a bit and possibly give the player a chance to explore the world. The Uncharted series does a really good job of balancing out action and plot, but those stories are more on the action blockbuster side and aren't really too involved compared to some films.
Lastly, giving the player control over the characters and sometimes the plot doesn't really leave room for literary devices such as foreshadowing. The reason for this is that every choice must be accounted for, so then each one would have to be foreshadowed in some way, which would be offputting in two ways. One would be that the foreshadowing not pertaining to the choice you ultimately make would all be in excess and be in there for nothing. The other, and probably more crucial, problem is that the choices would be made apparent, giving the player a feeling of a lack of control, which is the opposite the game is trying to accomplish.
The same could be said when trying to apply film techniques to invoke mood and tone such as lighting, framing, color, etc. Yes, all of this can and is accomplished in the cutscenes, but in the time you're in control of the game, this can't be accomplished. Games run the risk of the player goofing off instead of focusing on someone talking or things moving around in the environment. Sure, they are being entertained regardless, but it doesn't do any service to the plot whatsoever. It's a clash between a directed experience while making the player the director. At some point, it's going to fall apart even for a small instance.