There's backstory that's in the game, and backstory that is in the game bible. I am all for backstory that makes its way into the game, and wary of game bible backstory.
(What I'm writing here also goes for novels and TV shows, but games do a lot more world building, so I'll stick to games here.)
It is easy to write backstory. Backstory, when it is not in the game, costs nothing except the time it takes for the writer to come up with it. People look at The Lord of the Rings and its yards of backstory and think it's not a real fantasy world unless you can trace the hero's lineage back generations, and talk about the wars before the one we're fighting, and so forth. I mean, Tolkien managed to publish an entire book of backstory, The Silmarillion, and it's still in print.
The problem with this sort of backstory is it becomes hard to remember how much of it you have actually put in the game. Writers think that because they've written backstory, they've accomplished something.
But often no one reads backstory documents. Producers and creative directors are fond of asking for backstory documents, but artists are not fond of reading them. People like to be told a story, and most backstory documents are just recitals of things that happened.
Also, backstory documents often fail to focus on the theme of the game. They are just the writer letting their imagination run amok.
Consequently, if an artist or level designer does read the backstory document, and throws something into the game based on it, sometimes they are not reinforcing the main story, but diluting it, or muddying it.
Consequently I am very suspicious of spending time writing game bibles. Instead, I'd rather spend time writing descriptions of things that will actually go in the game. Environmental narrative, for example. What is scratched on the walls of that cave? What is in that basement? What is strange about the ruins on the hilltop? What do the names of things tell you about this world? What folk story does that beer label refer to? Why are those tankards shaped so erotically?
We generally put backstory in a game in order to create a sense of immersion. But what creates a sense of immersion? The recital of historical facts? Or bits and pieces of the environment that hint at a broader world? The real world is full of symptoms of historical events, while the historical events, the causes, are buried in books.
We are used to running into hints of the past; we like speculating about what they mean. In my neighborhood in Montreal, you can see the shadows of centuries: a two story stone wall topped with brick, a diagonal of black pitch running down the side of a building where it used to meet another roof, a bricked up hole that used to be a door, or a window. I love imagining what was there before.
I think that hints of the past are more engaging than pushing history at the player. The player has an imagination; let them exercise it, and they will create a richer, more personal world than you can provide them.
"Show, don't tell" is a screenwriting maxim. "Hint, don't show" might be an environmental narrative maxim. We can only put so many objects into our world, since each has to be lovingly crafted in the computer. But the few that we can afford to build can stand in for thousands of other objects we didn't put into our world. The trick is to leave gaps in the evidence. Don't tell the whole backstory. Leave hints at a backstory -- possibly ambiguous hints.
But all this is not game bible backstory. This is in-game backstory. That's what I think game writers should focus on.