For us, stopping the game to show a moving breaks the experience. To preserve the suspension of disbelief and attempt to keep the player immerse in the game, we've made it a constraint to keep all story telling in the game engine, and almost always in real time while the player retains control of the camera. Remember how liberating it was to play HL1 and not have to smack the Space Bar so you could keep shooting headcrabs?Lee Musgrave, Head of Art, Rare Software
Main reason we tend not to infect our games with too much pre-rendered movie nonsense is that it jars the player out of the game world. Even if you use the same character models, BG geometry and textures in pre-rendered movies as those that exist in a Real-Time engine, things will look different. There is no doubt that pre-rendered movies have significant ability to look more like real movies, some would say to look better - but this level of fidelity is not always the desired result when you are trying to create an overall universe for the player that is coherent and cohesive throughout their time in your game.Ru Weerasuriya, Ready At Dawn
We take so much care in spurring emotions through gameplay that we run the risk of detaching the player from their experience, especially by making them watch events unfold. Ultimately, interactive gameplay is a form of narration, as are movies. Although the two are not mutually exclusive, one can often diminish the power of the other. Our goal is to make the player always be the catalyst in the story, play the action rather than watch it whenever possible, hence the reason behind reducing the amount of cut-scenes and movies in our games. In addition, by using high resolution cinematics many games tend to switch between two distinct visuals styles and that can be a detriment to retaining that same gameplay experience. To put it simply, how would you feel if a movie switched constantly between two looks and two different narratives as you were watching it?