Video games as a multimedia creation require good work in all departments, whether it's gameplay, visual design, music & sound (including VA where it applies) more broadly or writing. Whichever elements are to be emphasized depends on the game in question and the sort of experience it aims to provide to the player, but narrative design matters regardless of how storyfaggy a game is supposed to be.
Yeah. There's no shortage of games with shit writing that were wildly successful due to good gameplay. As that one dev said, "story in video games is like story in a porno."
Sure, but that's in spite of their shit writing and not due to it. And narrative design extends beyond just writing the plot and characters. It's what ties the aesthetics of the game together, akin to a blueprint for the audiovisual design. So a game with a serviceable underemphasized story, but with cool factions and environments I'd label as having a good narrative design (that was translated into good audiovisual design). Same as in an action flick whose story only serves as a pretext for going from scene A to scene B. The quality of the action itself matters, but it can be all that much cooler depending on the various sets and props being employed.
It depends on the genre and the execution of the story. A lot of games are just pure gameplay and the story is just a thin veneer, like a number of Nintendo titles. There are so many excuse plots or just plain bad plots that I just mentally skip over them.
What really gets my goat is when a story is actively terrible through things like blatant inconsistencies, lack of planning, etc
and when the fandom consists of morons who think it's un-ironically amazing.
I'll use a specific example that I'm very familiar with: Starcraft. The story is bad. It's not simply an excuse plot like 1995 Command & Conquer (no offense to Westwood, I love the atmosphere in their RTS games), it has ambitions of being deep but the writing team (who, I'll note, had zero prior experience writing) completely botches the execution. Key plot details are hidden in manuals and tie-in fiction that nobody read. The writers admit to making up the story as they went in interviews, forgetting what they wrote, and
boy does it show! Character "arcs" are haphazard and inconsistent. One character is played up as being a hero because he didn't regret a stupid plan where he went around incinerating the few habitable human planets when that plan clearly didn't accomplish anything besides pointless genocide, right after he previously angsted about incinerating planets being terrible and he should try a different plan. The one female character is fridged to fuel the space cowboy hero's plot, then subsequently resurrected by evil space magic as a Diablo succubus with a completely different personality who happens to share the same name... simply as an emotional suckerpunch for the hero/player even though this doesn't serve her arc at all and actively sabotages the arc of the actual villains. (Unsurprisingly, it turns out that the employees were sex offenders.) That script needs tons of redline corrections, or better yet being thrown into a lit fireplace.
I could excuse the company's incompetence in that respect. I still despise it, but I can excuse it simply existing. There's too much stupid out there to spend so much effort on this one example. What I cannot excuse is the writers being arrogant morons who think they're perfect and the fans being idiotic sycophants who seriously think this drivel is amazing and attack anyone who criticizes it. That's just fucking insulting.
As far as there being a lack of urban fantasy, I don't really see how that's the case. Persona 5 is urban fantasy. Devil May Cry 5 is urban fantasy. Neo: The World Ends With You, Ghostwire Tokyo, Troubleshooter: Abandoned Children, these are all urban fantasy titles. Some of them are quite good but if your metric is just Bloodlines/World of Darkness and "Bloodlines is the only notable urban fantasy game", I can see how someone would think that in addition to not jiving with Japanese stuff.
Sorry to tell you but weeb shit doesn't count as true games.
These examples are a 2016 jrpg about astral combat in Tokyo, a 2019 action game about a half-demon pretty boy fighting demons in a "Red Grave City", a 2021 jrpg about Tokyo high schoolers fighting for their lives in a battle royale, a 2022 action game about a guy fighting the evil dead in Tokyo, a 2020 turn-based tactics game about police in a free trade city called Valhalla... what is the point being made here? I already linked two articles saying that in Japan there are more urban fantasy games than the West.
When I think "urban fantasy," I think of Harry Potter, Anne Rice, True Blood, Lost Girl, Buffy/Angel, Charmed, and those bazillion interchangeable paranormal romance books where the heroine falls in love with a sexy vampire/werewolf/wizard/mummy/leprechaun/fallen angel/unicorn/dragon/genie/pagan deity/whatever. I think of elves, dwarves, vampires, wizards, dragons, and other fantasy races living in the modern day. Usually secret from muggles, otherwise we'd cross into Dungeonpunk.
If those games are your best examples, then you're proving my point for me.