I also wrote a proposal for a Malazan videogame. Our producer went to Steven Erikson's house to discuss it with him. I think Ian Camerson Esslemont liked it but Erikson wasn't so keen - my design for the game strongly resembled my current project, The Shadow Sun, while Erikson wanted something more akin to a first-person shooter. As you can imagine, it didn't work out, though I did receive a nice signed and personalised Subterranean Press edition of Gardens of the Moon.
Scull states that the head of his company spoke to both Ian Esslemont and Steven Erikson about the game, which would have been an RPG. However, whilst Esslemeont was keen Erikson was not, and apparently preferred a first-person shooter type of approach.
Later on, Scull talks about how he envisages a Malazan game looking:
Of all the current major fantasy series, I'd say Malazan was easily the best fit for an RPG in the style of Baldur's Gate. The whole series is, after all, a high-level homebrew D&D game played out in novel form across multiple continents with hundreds of characters. It would be an easy thing to strip away the standard RPG races and classes and replace them with Malazan-specific variants, then start the protagonist as a lowly squad member in some far-flung corner of the Malazan Empire during the events of the series. Once you introduce warrens into the mix you can even justify having the protagonist flitting in and out of events depicted in the novels. Even the magic system, while unusual and perhaps tricky to adapt at first, would lend itself to some new and potentially interesting system design outside of the standard Vancian/mana-based approach.
For me, Malazan is not so much character or even plot-driven as it is world-driven. I read it because of the setting and Erikson's febrile imagination; stuff that translates perfectly well to game form and would give a Malazan title a massive advantage over the tepid worldbuilding efforts of even companies like Bioware. The complex storytelling of the novels could easily be ignored or strategically touched upon to enhance the protagonist's own story.
With series that are very character-driven, I agree that it is very difficult to separate the game enough from the source material/central narrative to make it worthwhile licensing as a setting. It's the old Dragonlance versus Forgotten Realms dichotomy; outside of the story of the Heroes of the Lance, the former has very little to offer while the latter is, by virtue of being a complete clusterf**k, a wonderful place to set a game in.
(I know Erikson has criticised the Forgotten Realms in the past. I always found that somewhat ironic in the circumstances.)
Interesting stuff, and a shame it never got made.
Look out for a review of The Grim Company shortly.