A Google search for board games and literacy inevitably turns up information about overtly educational board games, specifically designed to teach reading skills to kids. I find this trend interesting, because my students never really like games when they are designed to be more educational than fun. Review games in class usually meet with a lukewarm reception, almost as if the material I'm trying to teach automatically taints the games with boringness. They are like little kids who know that mom is sneaking them extra veggies on pizza night.
That said, I can teach my students a lot—and learn quite a bit about them—by playing games. Students who are reluctant to read will try much harder when deciphering in-game text than they would on a standardized test. When we are playing games, students will ask more questions and take more risks. To them, there is no pressure because it's "just a game."
One of my favorite games to play with students when I want them to read is Sentinels of the Multiverse. The comic book theme attracts a lot of teenagers, plus the fact that it's a co-op game encourages good behavior. But in order to succeed, players must be able to read the text on a card, connect it with other cards in their deck or in the game at large, and find a way to effectively do battle against a common enemy. (Plus, if they like the game, I can direct them to the comics.) Other card games like Magic: The Gathering and even Dominion are interesting to play with students because their interpretations of card text tell you so much about what information they process and how they process it.
Although I haven't played old school RPGs or visual novels with my students, and will probably never have the time to, I suspect that these games naturally promote literacy because they are compelling. Several of my early vocabulary words were picked up from video games, and I can't be the only one. I believe that games, both analog and digital, have a lot of potential as tools for literacy... as long as that is not overtly what they are about.
This makes me wonder. I am a public high school teacher, and my lesson planning focuses on concrete objectives that my principal can immediately understand if he comes by for a walkthrough. I also teach at a Title 1, where there is extra pressure for teachers and students to "work bell-to-bell." But students only want to play games when they genuinely feel that they are getting to play, no strings attached. I'm still looking for that happy medium with games based on class material, where it truly feels like we are having fun.