Early reading.

Some things to read.
Before, At, and Beyond Good and Evil • Ken Bayer -- Source
Video Game Internal Turfs and Turfs of Play • Laurie Taylor -- Source

So I read them: -

'Before, At, and Beyond Good and Evil' was the most interesting. I didn't learn a great deal from it, but what I did get was that morality can be used in games in different ways. And in the examples of Fable, Knights of the Old Republic and Deus Ex: Invisible War Bayer showed three different ways it has been used.

Fable - The advertised consequences are mostly visual and morality is a gameplay tool. The decisions don't have major consequences.

KOTOR - Effects the story and gameplay. The story is all about good and evil. You are rewarded for being either one or the other, the important thing it to choose.

Deus Ex - Makes moral decisions harder. It removes the importance of usual things that would tip you to one side or the other such as money or experience points, leaving you uncertain which choice to make. It deals with the grey areas and forces you to make decisions based on your own morality.

Through all of these the article emphasises the integration between moral choices and gamplay and how this also links to the narrative.