When I was a kid I was given some D&D sourcebooks as a gift one Christmas. I don't think I ever played a single game, but I remember obsessively trawling through the books, finding the world implied by the ruleset fascinating. It wasn't so much the setting, which seemed like generic fantasy fare, but more that there were rules governing how the fantastical stuff worked. I was especially riveted by the descriptions of spells and their effects, which seemed peculiarly plausible in the matter-of-fact tone in which they were written. It was like reading an instruction manual for a Honda, except the Honda was your character. Also, the Honda could shoot lightning bolts.
Around the same time (age 11 or 12, I think) I read through Lord of the Rings for the first time. I suppose I enjoyed the adventure story, though I'm sure I didn't fully grasp it. But what sticks out the most in memory is poring over those huge appendices detailing the history of this imaginary world. The fact that Tolkien had gone to such lengths to invent extensive cultural, political, and linguistic backdrops for his novels blew my mind. There was a real lived-in feeling to this fantasy world, although much of it was (and is) so esoteric I could never commit to it on the level others could.
When I read Dune for the first time a few years later, I had a similar experience. There was, again, an extensive appendix, featuring a glossary of the pseudo-Arabic future space language, a timeline of significant historical events, assorted fragments of religious documents, even a satirical poem. Whatever the reasons - probably my growing maturity and reading comprehension skills combined with the availability of a feature film, a protagonist about my age with godlike powers, and Frank Herbert's slightly less opaque writing style - I latched onto the Dune universe much more strongly than I had any other fictional setting.
By the time I'd gotten to college and delved into the Wild West of campus network file-sharing - this was the pre-Napster early days, mind you - I had probably re-read the book and seen the David Lynch movie five times apiece. So when that untamed landscape of free software opened before me, I immediately jumped on the old DOS adventure game simply titled Dune and its not-really-sequel, the famous pioneer RTS game Dune II: The Building of a Dynasty.
But the real treasure was a massive PDF of The Dune Encyclopedia some kind soul had painstakingly scanned.
This giant tome, first published in 1984 with the bemused, if not entirely wholehearted, approval of Frank Herbert himself, is the finest example of "fan fiction" ever published. Come to think of it, the fact that it was published, period, speaks to its quality.
The volume's editor, Dr. Willis E. McNelly, and dozens of collaborators penned hundreds of entries on the ephemera of the Dune universe, everything from arcane descriptions of future weaponry to centuries-long histories of the novels' various factions and races. Although not canon, it was a brilliant compendium of background material, lovingly assembled in a brilliant way: in the form of an in-universe encyclopedia, referencing fictional texts throughout its extensive study of the Atreides Imperium. Dr. McNelly's collection was so thorough and so compelling that Westwood Studios, developer of Dune II and later Dune games, stole from it. The idea that there could be "primary sources" in a fictional universe was especially notable to me, buried as I was in my literature and writing studies; it lent the universe an air of legitimacy, however slight.
(Of course, this was all in the days before Frank's son Brian and his hack ghostwriter accomplice took a giant dump all over the series with their procession of abysmal cash-grab "canonical" prequels and sequels. And used the power of copyright and estate to muscle everyone else out of the Dune business in the process.)
Had The Dune Encyclopedia been compiled today, it would have undoubtedly been in wiki format, much like my recent insomnia cure. But in some ways, I think that might have missed the point.
To my mind, nothing can replace the feeling of a tangible artifact when it comes to building on a fictional world's reach. As a kid, I adored the "feelies" that came with some PC and NES games. Michael Abbott's great post about these in-box extras - paper maps, decoder puzzles, 3D glasses - links them to the in-game codex in Mass Effect 2, which functions as a digital encyclopedia of sorts to flesh out that fictional universe. His point that the codex contains "pertinent, not disposable lore" is well-taken. There is a lot of fascinating stuff in there for those players who choose to explore it. It makes for a much richer Mass Effect experience, helping set this particular game's story within a larger fictional space. I'm sure I'm not alone in appreciating the creativity and dedication it takes to construct an engaging universe for your game to take place in.
That said, I have to disagree with Michael's comment that this codex, or any in-game codex, really, is "well implemented." In ME2, as well as in that other high-profile BioWare opus, Dragon Age: Origins, navigating through the codex is a chore. In Dragon Age, the codex/quest menus (on 360) were especially difficult to manage; entries were not numbered and navigating to a new codex entry often meant inadvertently marking other unread entries as read - thus dropping them off my list of "new" material. It was even worse in Oblivion: while it was cool to be able to pick up and read books, it felt like a disruption to the flow of gameplay, even when the content of the supplementary material was interesting.
Thing is, I'm not sure there's anything developers can do. It's just a pain in the ass to read text on a large screen. It might be more palatable on a PC, but that's how I played Oblivion and it still felt like a distraction. The act of playing a game and the act of reading about that game's world feel like two distinct activities that, to me, are best enjoyed separately. It would be interesting to see if BioWare keeps stats on how thoroughly players explore the codex in, say, ME2. After all, it does serve a similar function to the appendices found in Lord of the Rings and Dune.
Yet while I understand the desire for an in-game codex to help players understand the fiction and immerse themselves in it, I can't help but think there are more effective, meaningful, and potentially profitable ways to extend your game's universe. And I'm not talking about Collector's Editions; most seem stuffed with demonstrably useless physical artifacts that are more marketing collateral than supplemental content. A figurine might be nice for a desk display, but it doesn't connect to the game experience in a meaningful way like the feelies of old did.
Honestly, I don't think that's just nostalgia for outdated copy-protection mechanisms: as Michael points out in his post, feelies were often essential components of the package, a (sigh) meta-game experience that brought the player out of the computer game, but not out of the game world. There's something psychologically interesting that happens there, I think. You are compelled to reflect upon the game and its fiction in a different way because of the switch in modality. The very act of reflection should be an important goal in itself.
Game developers often have to (and should) think like teachers: their students have different learning styles. Communicating content in different modes is crucial if you want to reach everyone. If you want to meaningfully extend a game world's fiction, I would argue, you've got to look outside the game itself.