There is an room for dragon's lair with more interactive and less hit button X now to not die.
I don't see 'Dragon's Lair' having more than nostalgia value - at the time, having 'live' (well, cel-animated) footage made it stand out from the primitive 2D or wireframe computer graphics of the day. There were already better 'interactive fiction' experiences in the form of text adventures, or 'dungeon' games with minimal 2d graphics. Today, it could be done far, far better as a regular FPS-style game. 'Interactive adventures'
have been done better since the 90s - from
Monkey Island to
Half-Life.
The problem is, every
meaningful choice point greatly increases the number of subsequent story variations that have to be (a) filmed (expensive) and (b) written (expensive
and very hard). New technology might alleviate (a) - although expectations for video production values are now sky-high - but it can't help with (b) without some serious breakthroughs in artificial intelligence (given that actual
human intelligence as found in Hollywood isn't always doing so well on the non-formulaic-and-predictable writing front these days - please wake me up when Netflix and co. stop recycling watered-down versions of Watchmen/The Dark Knight Returns).
What Netflix/Bandersnatch
has done is made branching video technically seamless in that there are no glitches or blank screens at the choice points. They've also been clever with tricks like quickly catching up if you "die" and even remembering
some of your previous life's decisions (but that only makes sense because the story is
about deconstructing interactive fiction) - but this doesn't remove all of the pregnant pauses in the dialogue and action (cue dramatic music) while the user makes their choice. Nor does it solve the practical limitations on how many meaningful plot branches the technology can accommodate.
What seems to work better with modern gaming technology is combining a mostly-fixed scripted story arc (that writers do well and avoids the 'combinatorial explosion') with fully interactive action/puzzle sequences (that computers do well). E.g.
Portal. Or, the sandbox-type game (e.g. Minecraft) which is primarily about world building, but which can provide a background for either scripted quests or multi-user virtual soap operas.