October 21, 2011 at 11:17 PM EDT

On October 22, 2001, everything we ever thought we understood about videogames changed. Gamers were looking ahead to the oncoming arrival of the next generation of consoles. Nintendo was one month away from the North American release of the GameCube, an adorable candy-colored travesty that would usher in a half-decade in the cultural wilderness. Microsoft — still the Evil Empire in those simpler, bygone days — was going to release its own system the same week: A brutal tank-like abomination called the Xbox, which came equipped with a controller that looked like a blunt instrument used by cavemen to crush mammoth skulls.

Sony had already released its own next-generation console one year earlier. The device was called the PlayStation 2. It would become the best-selling videogame console in history. It would initiate a massive shift in how the culture thought about videogames, and how videogame players thought about themselves. And if you want to pinpoint a specific moment when the industry began that massive shift, you could do worse than pointing to October 22, 2001, when Rockstar Games released Grand Theft Auto III into stores. 

GTA III was a showcase for the powerhouse PS2. Earlier games in the series were fun, prankishly rude ditties; you played a criminal, and observed the gridlike world from an omniscient, top-down perspective. GTA III created an entire three-dimensional world, setting you at ground level in a city that could be freely explored. It wasn’t the first game to combine different genres into one, but the component parts of GTA III‘s gameplay were well integrated: it was a driving game, a third-person shooter, an RPG-inflected adventure, a crime thriller. The Casual Gamer — a primordial notion, five years pre-Wii — probably thought that GTA III was less a single videogame than an entire entertainment system unto itself.

GTA III kickstarted whole host of changes in the videogame industry. Along with Halo: Combat Evolved, released in November 2001 as an Xbox launch title, it’s a central to the paradigm shift in the early ’00s that transformed videogames either into “a legitimately cool and important cultural force” or “that annoyingly fashionable Hot New Thing that meant Lindsay Lohan attended the launch party of Saints Row The Third” — depending on your perspective. (I’ll never forget watching The O.C. and noticing that Seth Cohen had a Rockstar Games poster up in his bedroom.)

But the most impressive thing about the decade since GTA III was released is the amazing run it kickstarted at Rockstar Games. The developer has continually evolved the GTA III system in madcap new directions. GTA: Vice City practically created the neverending ’80s revival. GTA: San Andreas expanded the open-world experience to a fanatical extent, rebuilding a bizarro-California with Fake Las Vegas thrown in for kicks. (If it’s possible for one of the best-selling games ever to be considered underrated, then I’d say San Andreas counts: The game’s gonzo cocktail of gangster street grit and jetpack absurdity makes it one of videogamery’s great weird entertainments.)

But the GTA series was never just about technological leaps. GTA IV brought branching narratives to the franchise, and also starred its most endearing protagonist: Eastern European immigrant Niko Bellic. And last year’s Red Dead Redemption suggested an entirely new stage in the Rockstar open-world experiment. It was set in a sparse, almost meditative landscape, where GTA always preferred urban environments; it was elegiac, even ruminative, a far cry from the glitzy snark of Vice City; and it featured one of the great endings in videogame narrative history.

Dan Houser  — Vice President of Creative at Rockstar Games — has taken central roles in the development of all the games in the GTA series since GTA III, along with his brother, Sam. (Dan is actually credited as a writer or co-writer on every GTA game since II, as well as Red Dead and the prep-school curio Bully.) However, in conversation, Houser is quick to describe all the games as a team effort. “I think one of the reasons, hopefully, that Grand Theft Auto is still innovative and interesting,” he tells EW, “is that it’s it’s still got the same executive producer, producer, writer, art director, lead programmer, audio guys, and a bunch of other guys that have been on it since III, and then a bunch more that came on for Vice. We’ve always worked well together.”

Houser sat down with EW recently to talk about the creation of GTA 3, and the conversation quickly spiraled into a freewheeling discussion about the nature of world-building, the growing possibilities of open-world storytelling in the last decade, the development of the series from GTA III onwards, and the potential next stage of videogame evolution.

ENTERTAINMENT WEEKLY: Going into Grand Theft Auto III, how did the knowledge that the gameplay was going to evolve from the top-down perspective into this whole new 3-D environment affect your ambitions for the game’s storyline?

DAN HOUSER: As we were making GTA III, new problems would constantly present themselves. Not problems, but challenges. On the story side, one of our main challenges was that the top-down games had had really no narrative at all. They’d been based around the idea of freedom. You could do what you wanted, when you wanted. We wanted to keep that idea of freedom and expand on that, and also put in what could be seen to be a somewhat contradictory idea, which was narrative.

The real challenge was figuring out a way to structure the game that combined freedom — freedom to do seemingly anything at any time, to do a mission, not do a mission, to do something else, to work multiple storylines at once — but also have some kind of coherent narrative that brought it all together.

All of Rockstar’s open-world games graft the non-linearity of the gameplay onto one overarching plotline. In Vice City, it’s the rise of Tommy Vercetti. In Red Dead, it’s John Marston’s quest to save his family. Would you ever want to do a GTA more in the style of Fallout, where the player can go in any number of different directions, and there’s not necessarily that single overarching plotline as a backbone?

The differences between us and a Fallout are not that pronounced. GTA started out as an action-adventure game. Games like that started out as RPGs. But if you looked at them now — where they all ended up — to a layperson, the differences are much less profound than the similarities.

But in terms of your core question, that’s sort of an interesting dilemma. You’re constantly balancing freedom, the ability for people to generate stuff themselves. Making it too complicated takes it away from a large part of the audience. People also love narrative, and removing strong narrative removes a lot of their guidance through the game. The sense of accomplishment, the sense of finality with the game: That is important.

It’s interesting to see how that storytelling has developed. The main character of GTA III doesn’t speak — he doesn’t even have a name. Vice City‘s Tommy Vercetti has a shady past. San Andreas‘ CJ has a whole family unit.

You try not to make the stories always the same “Rise and Fall and Rise Again of a Superhero Bad Guy.” We try to make it more nuanced and interesting than that. In Grand Theft Auto III, we had so many problems to solve. No one had ever streamed in data for disc. No one had ever done motion-capture cutscenes in the way we were doing them. No one had ever had this seamlessness between the modes. In those days you had a driving game or a shooting game. If you had a level-based game, you might have a driving level and a shooting level. And we were suddenly saying it was all of this. All of these genres were gonna be combined in a completely seamless way.

We had so many things that we were doing for the first time in that game, that we had no kind of rulebook to follow. The way we were trying to tell the story — to give you the sense of being in this world yourself — it just seemed simpler to say, “Well, he’s not going to speak, everyone else will speak to him.” Partly, because of the way that we were doing animation, we didn’t know if we could have more than one person speak! It was so limited. No on had ever done stuff that people now take for granted. It was brand new then.

In GTA III, you begin in the lower-class corner of Liberty City, a kind of Brooklyn/Queens area. Over the course of the game, you expand into the Manhattan-ish downtown, and then finally into the wealthy suburbs. When did you hit on that as the progression for the game?

That Liberty City was not particularly meant to be New York. That was meant to be a hybrid of a generic American city: Chicago, Pittsburgh, Detroit, New York, Philly. An old, post-industrial American city. [GTA III] was America, whereas Vice City was clearly Miami.

In terms of flow, you wanted to start out feeling poor and work to being richer. That made logical sense. You also wanted to start in the underworld, so it had to be the roughest, ramshackle bit of the map. Rundown docks, that kind of stuff. And then, if you’re gonna meet rich guys and gang bosses, they were gonna be suburban, or in the downtown high-rises. That made sense for later in the game.

We always wanted to end with that big suburban scene around the dam, which obviously doesn’t fit into any particular movie, but seemed like it would be a kind of iconic way to end the game.

NEXT PAGE: “It’s gonna annoy people, but it’s gonna annoy people in the way that they want to be annoyed. They just don’t really realize it.”

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