Funcom views the project as an opportunity to evolve their business model, as well as The Longest Journey brand. The press release announcing the project even implies that if the brand was to gain enough popularity, a Longest Journey MMO could be brought to life. Given the series' intricate, parallel worlds and the rich culture that permeates both, that doesn't sound like a bad idea at all.
And neither does Dreamfall Chapters. The project is certainly aptly named -- it seems entirely appropriate to think of the forthcoming episodes as literal chapters torn out of an ongoing book. Those who appreciated Dreamfall (essentially an interactive film or novel), will likely find that a fitting analogy. The Longest Journey's author (as it were) and game designer, Ragnar Tørnquist, has confirmed to Joystiq that he will be writing the story and keeping a "vigilant eye" on the game's production.
Though Dreamfall Chapters is currently set for online release only, Funcom is considering retail releases featuring combined chapters at a later date, both for consoles and PCs. No release date has been announced yet.