This is written in direct response to Jim Sterling's article:
Why do videogame movies fail so much?
In your mentioning of what film adds via adaptation to other forms of media, you neglect to say what it detracts. From a play it omits the proximity of having the action unfold in real time, mere feet from you. From a novel, it subtracts the timelessness of it, a sprawling story with an ever expansive world. This shows that any form of adaptation is a process of addition AND subtraction. Yes, movies adapted from video games would lose the interactivity but they would gain other things. The communal experience (absent from most single player games), the sense of time and of forward momentum, in some cases a tighter focus on narrative and character development, and so on.
You say adapting a video game suggest that they can't tell good stories. But does the adaptation of the Lord of the Rings novels into movies prove that the books don't tell a good story? Does The Godfather movie do it to its source? No. They prove that the story is so powerful that it can transmute into another form and retain its power. Its the highest honor a story can possibly receive.
I have to take the time to say that the reason Silent Hill didn't scare you was because it was terrible. As have all video game based movies. You said it yourself: you didn't care about the character Pyramid Head was chasing. The movie failed because it was poorly made. Empathy was not established. And, a large part of why Pyramid Head is terrifying is because of his psychological aspect, the meaning behind the scary image. Silent Hill, the movie, just trots him out there for a cheap fanwank.
When it comes to the issue of actors in a movie not being the same as their presentations in the game, this feels like an outright refusal to accept the possibility of a good video game based movie. Who's to say that the Bioshock movie won't find someone who brings even more nuance to the role of Andrew Ryan? On the subject of Bioshock, it seems to be the consensus that the narrative falls apart in the last third. Might not a film adaptation rectify this problem and display a fine work of world building to an even larger audience so that they too might be enhanced by its excellence?
I must announce that I am in the process of attempting an adapted screenplay (not affiliated with anyone actually thinking of making the movie, solely a personal project) of that game because I feel so strongly about it. I may fail miserably but I am passionate and, no matter what, it will be made with love. On that note, no games do not need to be made into movies. Nor should they unless there is some improvement or worthwhile change to be made. But can they? I hope so.
I'll tell you what is wrong with Video game movies. The wrong people make them.
Get some people with talent, and at least some passion for the material. Silent Hill had a director with the passion, but he got stuck with a writer who didn't care.
Imagine a talented crew, who wanted to, if not emulate the game on screen, tried to sell the world of the game to us?
We need "You will believe a man can fly," for video game movies.