Hegel, maybe? Phenomenology of Mind?

You're speaking of flow state it sounds like. See wikipedia link for associated psychologists and philosophers.

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It seems to me that this is about awareness of the self. Are you Datalchemist, John, or a God of War?

William James coined the term, "Stream of Consciousness." However, in my readings of him he doesn't describe how consciousness narrative can take a hold of the experience of being an Other, or as you have said the experiences of reading as John or playing as Kratos. In my studies I have not encountered any single term for what you are referring to. It is a kind of "conscious narrative". When you search such a term in google it comes up with Stream of Consciousness and Narrative. According to my purview there isn't much on how it works, but rather when it does.

Would this fall under phenomenology? I know phenomenology is only a thinking tool which is less than I'm implying. The question stems from my perspective of philosophy one that rejects having to define what kind of truth is truth and what not. I apply a much more relativistic approach to philosophy. I tend to use people's reasoning against them to get them to that next logical step rather than skipping 10 steps ahead. The Socratic method if you will.

I am not sure what isn't phenomological in nature. I do think that it is a psychological issue.

I was thinking about this last night, and what you are referring is role playing, a kind of fantasizing. There is probably plenty on the "psychology of role playing" that can be found online.

Personally, I haven't read much into it, but there is a step you can take. :)