The very first thing I saw in virtual reality was Wevr’s theBlu demo, back in the early days of the HTC Vive headset. It’s the thing a lot of people mention when they’re asked about the most compelling VR experiences, and with good reason: the demo transports you to the helm of a sunken ship, the whole ocean above your head; it allows you to take in the beauty of the scene for a few minutes before, out of the depths, a vast blue whale slowly emerges, dwarfing you.

I took the headset off and walked away across the busy floor of the game conference, but I could still feel the water around me. I told my friends. They joined the long queues. They told their friends. And that was the entire story that was told: there is a whale and it is beautiful. Since then, I’ve flown spaceships and climbed buildings and repaired robots in VR. I’ve shot a variety of floating objects. I’ve sat cross-legged in the middle of Venice’s Piazza San Marco and looked down on the people in the flooded square.

But here’s what I haven’t done. I have never met a single original, memorable character in virtual space. I have never interacted in a conversation. I cannot recall a single line of dialogue. When I bring this up with Jason Rubin, head of content at Oculus, the company behind the Rift headset that kickstarted the modern VR revolution, the reason becomes clear: storytelling – actual storytelling – is very, very difficult with this technology.

Rubin is no newcomer to narrative games. The co-founder of Naughty Dog (Uncharted, The Last of Us) and former president of THQ, he has a history of design, production and storytelling across a vast swath of best-selling titles. Originally joining Oculus in 2014 as their head of worldwide studios, Rubin was promoted to head of content this year, where he essentially acts as a high level producer for all of Oculus’s VR development. If there are to be stories on this platform, it’s his job to facilitate them.

Rubin closes his eyes and tips his head back. “The first story that I saw in VR would have probably been Lost, from Oculus Story Studios, and I was sitting on the ground,” he says. “I laid down on my back, because most stories I’d seen up until that time gave you a fixed camera – they told you where to look. But Lost has a 360 camera, the world is all around, so the first thing you want to do is look behind you. What you see is forest, and more forest. And so … I started standing up.”

When Jason Rubin talks about VR, he can’t sit still. During our conversation he scrutinises a soda can held an inch from his face, he spins in slow circles in his chair, he moves his hands in front of him exaggeratedly to demonstrate ways to use Oculus’s new Touch controllers. Partly this is the result of his animated personality, but it’s also an illustration of the importance Rubin places on physicality in his medium.

The Lost demo is a short cinematic experience which puts the player in a forest with a giant robot. Photograph: Oculus

Later, I play Lost on a demo station in the middle of Facebook’s London office. It certainly doesn’t feel appropriate to lie down. The first thing I do, after my eyes adjust, is look up at the sky and there is a bright moon up and to my right, framed by tall pine trees. There are ferns. A firefly lazily bobs in front of me. “It’s alive,” says Rubin. “It reacts to you being there.” The thought is so enticing that I instinctively move my hand towards the insect – but there is no representation of my body in this world. Lost predates the touch controllers and Oculus’s new focus on tactility, and so the firefly zips away.

It’s an interesting moment, but it’s not a story. It’s interesting that when Rubin describes Lost, he talks about immersion, but never any sort of plot. He doesn’t even mention the gigantic, lamp-eyed robot that, at one point in the demo, leans down through the trees and rumbles “Hello” at you. He doesn’t mention the disembodied hand of the robot, about the size of a horse, crashing through the undergrowth. In a standard game that would be a major talking point, a key encounter, but here, it cannot compete with the sensation of existing in a place, under a wide sky. “Put me on the top of Everest,” Rubin says later, “and I can sit there for 15, 20 minutes and just look around at the beauty. But –” and there’s a note of frustration in his voice, “there’s no story there.”

He’s right.

This isn’t to say that Oculus hasn’t begun to dip its toe into VR storytelling. Later, I’m shown Henry, a 10-minute experience by Oculus Story Studio that put me in the brightly coloured treehouse of a small hedgehog who is having a bad birthday. While watching the hedgehog walk around me in 3D was charming and the experience was polished, it felt like it was seriously missing something. Just as I found with the firefly, I was unable to touch or interact with anything. The story played independently of my intentions. It existed around me but my hands were tied.

Earlier in the day, I had been shown First Contact, an unbelievably polished demonstration of Oculus’s new Touch controllers. Under the guidance of a big-eyed, Pixar style robot, I feed floppy discs into a 3D printer that creates increasingly outlandish tactile toys. I sweep colourful trails through the air. At one point, I have to keep very still, and a purple butterfly drifts down and perches on the tip of my index finger.

When Rubin talks about the potential of Touch, he speaks more generally about play rather than narrative. He brings up Toybox, a game where “There is no game, there is no score, there’s no win or lose state … but there are blocks in front of us.” His hands folding naturally into the shape of the controllers as he demonstrates. “If I throw the block and you catch it … [get] your virtual hand under it and grab … and then we say ‘how many times can we catch this before we drop it’, you’ve just created a game.”

I am reminded suddenly of the way Half Life 2 turned the act of throwing a can into a tiny narrative punchline, way back in 2004. Valve realised that the Gravity Gun could be just as useful for playing a quick game of basketball with a robot dog as it was for hurling energy at soldiers, and I can’t help but wonder if we’ll see similar moments appearing in VR. Will improvised games bring us closer to fictional characters?

First Contact’s 3D printer gave me a gun. “Shoot the robot!” said the demonstrator. I did not want to shoot the robot, but he pressed me, so I did. A harmless suction dart slapped on to its forehead.

First Contact is a short demo designed to help Rift users learn how to use the Touch controllers Photograph: Oculus

At one point, curious about what would happen, I tried to lean my head forwards through a table. The problem, it turns out, with giving players interactivity in VR stories, is that they take it as a golden opportunity to go completely off piste.

“How do you tell a story when the player’s got their head under the table?” I ask Rubin. He pauses. “We are really early when it comes to VR storytelling,” he says, “I don’t think we fundamentally understand the ruleset.

“When the first video cameras came out, it took a long time to get a current language that we use in films and we all take for granted,” he says. He talks me through the invention of the “over the shoulder shot”, the standardised method for shooting conversation. “We don’t even notice it’s happening in film [anymore]. That took a while.”

Rubin moves through a list of reasons why that simple shot doesn’t work in VR, with the air of somebody who has clearly identified a problem but is unsure of the solution. “If you put a camera over someone’s shoulder, you’re like: ‘It’s discombobulating to be jumping back and forth between two people and reversing my view’. Additionally I may be looking [in the over the shoulder position] and I notice how huge someone’s ear is, which you never really notice in film.”

The more I think about presentation of even the most basic conversation, more difficulties emerge. How does the player enter or leave a conversation in VR space? Games like Mass Effect employ a cut or a fade through black, both of which are fairly jarring in virtual reality. Is the player a participant in the conversation? If so, how do they interact with the dialogue systems in a way that doesn’t compromise immersion? If not, do the participants acknowledge their presence?

Do the participants make eye contact with the player? Do they know where you’re looking? Do they care? The tactics that standard video games have developed to simulate human interactions are useless here.

“Right now,” says Rubin, “each one of these problems exists before you even get to the question of what story should be told.”

At no point, however, do I get the feeling that Rubin is simply throwing his hands up in the air and admitting defeat. Each frank concern with the practicality of VR storytelling is countered by some new description of an issue Oculus has overcome: how 3D cursors need to be drawn in scenes to allow players to accurately follow objects, how to track the player’s gaze to control narrative timing.

I ask him if there are developers who are getting close to cracking the other problems we’ve discussed. The whole over-arching problem of creating something that isn’t just an immersive environment, but also a world in which a cogent story takes place. “There is a submission,” he says carefully, “which is currently sitting in the office and has not yet been run, because we’re missing a file.” I am caught by how unexpectedly evocative the situation seems. “This is a first attempt at something that Oculus has funded as a storytelling device.”

He is deliberately cagey, and it’s clear this is partly because he hasn’t played it. There is an air, though, of Rubin as a stage magician drawing the audience’s attention towards a disk on a desk. I cannot help but wonder what problems it could be trying to solve, and my mind goes back to our chat about the complexities of depicting conversation, and the pioneers who first moved the camera over somebody’s shoulder.

“It has a plot,” says Rubin. “It has characters.”

It is fascinating to hear these basic building blocks of story being spoken of with such trepidation. But if VR is to move beyond its “train approaching the screen” stage, this is attitude that must be taken.