Yes, i think you would have to chop up a large story into parts. Of course, some parts could be further developed and expanded, but the overall plot would have to be known (mostly) upfront.
Regarding inter-game transfers and different endings;
For serialisation, my plan would be to have (mostly) one win state. It might be possible to have small variations, but generally one that facilitated a single object, treasure or ability to transfer to the next episode. Any other objects would be lost.
The next episode would start assuming you had whatever the goal was from the previous episode. Importantly, it would not be assumed the player had actually played the previous episode(s). It would be crucial that each episode can stand alone without prior knowledge.
A slightly different spin on the episodes model, that doesn’t require chopping up a bigger story, would be like a TV series where the state is “reset” for each new episode.
Lets take, say “Star Trek TOS” (i pick this for familiarity rather than as actual suggestion). At the start, everything is normal, then either;
- a force tries to take over the ship
- someone goes mad
- they beam down to a planet that goes hostile
In addition maybe, Kirk encounters a previous girlfriend, has a fight, makes lame jokes, Spock says “fascinating!”
At the end of each episode, everything is “reset” for the next one, so they don’t have to be watched in order. However, in reality the design would still afford a small amount of inter-episode transfer; a new crew member maybe.
Why is this different from separate games?
Because as a developer you would re-use a whole chunk of material, including graphics, sounds etc from one game to the next. In the above example, areas of the ship and the main crew would be in all game episodes. Maybe as much as 20-30% content could be reused, saving time and money on each episode.
If this were a commercial endeavour, there would be substantial value for money for a customer when buying his/her first episode (which wouldn’t have to be EP1). That customer is quite likely to buy more.