I find myself many times wondering when I design sounds and implement them, whether it should be loud or not.
In films, we normally mix by the philosophy of just using the audio that is important to the situation, like dialogue. Dialogue is important because that is where the story is truly told and understood. Without dialogue, it is usually up to our imagination to tell the bigger story. Sometimes though, a visual element can tell a story far greater than that of spoken word, but it is still dialogue and has to be emphasised in some way.
The point in the end though, is what should be loud and what should not be.
Dialogue should always be louder than anything going on at the time - unless it is intentional to muffle the spoken word, but then it is no longer simple dialogue, it is dialogue-by-design.
Dialogue can easily be narrowed down to just lines on a script being said, but actually, sound design, foley and music, can also become dialogue, because it can tell a story if used correctly.
The issue in a movie is often facilitated by a producer and a director who got the final word on said audio mix, but they will often understand that dialogue is important and let the sound mixer do what he\she was hired to do.
But how does this matter in games? How do we mix for games?
Games are really just terrible mediums for mixing because a game is normally not on rails. When it isn't, you have to think about what the player will do and how the player will interact with the world.
Normally, the player will do something that will just make a programmer cry. But when they do that, we as sound mixers and designers, have to make sure we don't ruin their experience when they decide:
"I want to kill that orc by using a drawbridge as a catapult and fire a sword in their face. NOT by using a sword the intended way."
So everything has to interact perfectly; they expect to hear the drawbridge, the sword flying in the air, it hitting the orc and the orc crying in pain. If they don't, the experience is less rewarding...though amusing nonetheless.
Then there is the time when you are mixing and you think:
"Well, I don't really wanna hear my own footsteps the entire game. But I do expect that, when my foot hit those wood boards, there will be a sound of someone walking on boards of wood."
Then you have to put that in, but you cannot and should not - make it so loud that you are aware of it consciously, only sub-consciously.