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I agree sci-fi is an outlier on this, but I also think all stories compete on setting to some extent. Fantasy most obviously (Tolkien, JK Rowling). But also for example the Jazz Age setting of The Great Gatsby contributed a lot to the novel's popularity and was a bit fictionalized, hard boiled detective writers like Hammett or Chandler wrote about a crime-filled world that was fictionalized for appeal, historical romances about lords and ladies are super fictionalized and so on. Writers try to put appeal into everything, that's why they're writers.
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Larry Niven isn't referring to merely an "unusual" setting in his quote (which I've never managed to find referenced online, unfortunately), but to the way in science fiction you are creating the setting from scratch. Gatsby is set in the Jazz Age, and you can pick up some aspects of it from that, but it is still in the stock set of settings the author expected you to have some ideas about, so it doesn't explain how cars work or how doors open. And by that, I don't mean the sort of "explain" at an engineering level, but things like "how combadges work" in Star Trek, i.e., when they work, when they don't, what can be sent on them, what failures they are prone to, etc. Even something as fantastic as Tolkien is still generally set in a particular milieu and he is adding very skillful and numerous brush strokes to a genre that existed already.

You've read many stories set in all the settings you mentioned. You have never read a story in which the fundamental shape of space-time is two time dimensions and two space dimensions before, unless you have also read Dichronauts. This is the supplementary material to the novel, which is mostly not in the novel and is not the story itself, just the background: https://gregegan.net/DICHRONAUTS/01/World.html You don't need that provided for something set in the Jazz Age, or a fantasy story explicitly based on myths that had been floating around for centuries, or a historical fantasy. Someone could write some equivalent, but you don't need it; it's already loaded into your head. That's the point.

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I think the SCP is great as a basically perfect infrastructure for playing in this space that makes room for community participation. But absorbing them as a whole into a story is tough. I think you put the basic bargain reasonably well int he following:

>With this sort of story, as a reader you are putting all your chips on the setting. Going in to this sort of work you should expect the conventional measures of a story to at least take a hit, and in many cases a fairly large one. And of course, if that's not what you want, then you're not going to enjoy it and I have no problem with that.

Where I would challenge that as it relates to TINAMD is I am not sure it fully succeeds even against this basic bargain. By contrast I would note Annihilation which is exactly as you describe, light on characters and plot and entirely about setting, and I think it sticks the landing on those terms in ways this book could have. But still, love its premise, love the traction its getting and I think the healthier way to engage with it is to cheer it on for its successes, which are significant.

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> This is such an investment into the setting that I don't find it all that surprising that I don't find the characters all that compelling per se.

His characters do tend to be a little flat, but I think I almost always found them compelling. His books tend to be a physics or mathematics primer, wrapped in a pretty thin plot, but as soon as you poke at that plot-wrapper, most of the time some pretty good social commentary comes steaming out.

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What is SCP
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https://scp-wiki.wikidot.com/

It's an open collaborative fictional universe.

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