It's a 2-edged sword. They can tell the story better in the novels, but then a good portion of the player base misses out. See: Rise of Kalecgos to Aspect of Magic. It was a very interesting and developed story in Twilight of the Aspects, but it was fairly simple, kind of anticlimatic and unfinished (Arygos?) in-game. There's just a lot more that can be done in the written medium, such as showing the thoughts of the individual characters, expressing emotions and other nuances.

The gigantic problem is that the novels really do leave a lot of players out of the loop. They often feel "not-canon" even though they are canon and whole elements that are important in the novels get completely dropped in-game. Chromatus, obviously. Benedictus story was abruptly ended in-game, but at least it was ended. I love the novels, but there is a serious and significant disconnect between the novels and the game.

I might be inclined to suggest that they replicate all novel events within the game, but perhaps without as much detail. Again, Kalegos ascension is an example. It exists in both mediums, allowing the players to see it in-game (er, sort of, legendary quest and all) but it has much more depth in the novel. If they take this route, I think it'd be best to put the novel out first and then in-game stuff later.