One of the biggest problems with cutscenes is that they can break immersion. You're accustomed to having free rein of your character, going where you will, doing what you want. How frustrating, then, to have that control forcibly wrested from you by the sudden and arbitrary cutscene. Worse, you may hear your character say things and watch him do things that you disagree with. You'll see him make choices that go against what you want him to do, and that's just tough. You're on rails now, and you just have to deal with it.
But there is an alternative, one that could drop you into the game world even more immersively than actual gameplay itself. Part of the inspiration comes from the Metal Gear Solid series, where you communicate with your support staff via codec, the high-tech version of walkie talkies (which is ironic, considering the inflated use of cutscenes and cinematics in that series), and part from Half-Life and Halo, with their moments of active exposition.
Let's say your character needs to meet an NPC at a certain time at a certain place. When you get to the proper location, if you're on time, the event happens as planned, and you interact with the NPC through normal dialogue choices, but you're free to leave at any time. If you choose to go, you take the penalty of missing out on that interaction, and the information that might have helped you in the game.
Or let's say you're part of a sensitive mission behind enemy lines, and your CO is giving orders to the troops. This would be a real-time event, and if you wander off, or lose track of what the officer's saying, you'll just have to deal with some incomplete intel and make the best of it.
I've been saying for a long time that games need to be more risky, and I don't mean fewer save points or tougher enemies. There needs to be a real stake, an active investment in what the character is doing, with real consequences. It's these elements that make our lives so fraught with meaning, and that should carry over into our games. This hearkens back somewhat to my rant on healthpacks, but this is an industry that can afford to innovate. The dissemination of critical game-affective information can be much more dynamic and real than sitting through a lengthy cinematic, or turning to a magical notebook that keeps track of the important missions and objectives.
How cool would it be to just interrupt an NPC in the middle of a long-winded speech and tell him "Gimme the gist"? Or be wandering around and accidentally overhear two characters talking about something related to your objective without actually interacting with them? Or to know the bare bones of what you need, and look it up on the Internet in the game? Exposition shouldn't be spoon-fed to us, it should be an active part of the game itself, like a secondary objective. Any way to keep the player moving and engaged can only help immersion and give a real sense of accomplishment. There's an old saying: Show, don't tell. With games, however, that's no longer enough. Don't show, don't tell ... just play.

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Many games these days are missing this interactivity-on-all-fronts approach. But some of the best examples of games actually doing this are Bioshock, which has some absolutely amazing and very subtle approaches to story, as well as the Half-Life series and even Portal.
Half-Life is rather obvious why, but the reason I say Portal is because I remember playing through the game and at the end of it I would be telling my cousin or friend or whoever else the main story idea. But when I think about it I realize there are no cutscenes and most of the story is through both the visual representation as well as GLaDOS' often hilarious but brief dialogue interactions with the player. And even then you have full control over the character during the time. Portal also achieved a lot more things that have broken industry standards, but this story idea is very ingenious.
When a game as small and simple as Portal can be one of the most immerse games to come out so far this generation, you know that the developers should be working towards that direction.Posted at 6:10AM on Jan 1st 2009 by Hashbrown Hunter