As far as narration goes, it all depends on the story - and I'm not sure that I have any hard and fast rules beyond what feels right. I'm a bit cheeky in my own story though - I have all three to some extent depending on whether I'm showing my MC's inner thoughts, giving the player instructions, or describing a scene.
I would say that third person is the least attractive overall (for games, I tend to prefer it in books). It's pretty distancing, and probably shouldn't be used where the player has control over the character's actions. First has its own set of problems... because it's more immersive, I do occasionally frown at the screen when I'm told I think something or do something that I fundamentally disagree with (first in games is substantially different to first in literature or film, again owing to the player participation). A good old-fashioned gaming second works well for me in most contexts - the Goldilocks-zone of immersive but author-led.
