Talking at a writer's workshop at GDC, and as reported by Shacknews, Obsidian's chief creative officer Chris Avellone has sung his praises for PnP RPGs as a tool for writing and designing stories. Snip:
He explained that being a game master in a pen & paper setting with people sitting around a table "allows you to get immediate feedback as to whether you are actually entertaining them or not." He added that direct feedback like that is invaluable for determining how engaging the world and characters are that they have created.
He also said that pen & paper RPGs helped them quite a bit back in his days at Interplay when they were developing Van Buren, the codename for Fallout 3 that was later cancelled in 2003. "We actually used pen and paper games to test out systems," he said. "We actually built a pen and paper version and brought the developers to the area and built adventures to test out mechanics. That turned out to be a really good experience."