A cutscene is an animated or live-action sequence used to advance the story, create spectacle, and provide atmosphere, dialogue, character development, and reveal clues that would otherwise be missed by the player during gameplay. The player often has no control over the game while a cutscene plays.
I find cutscenes to be a double-edged sword. On one hand, they usually look fantastic, allowing your game world and characters to be shown in a way that may not be reproducible in the game engine. However cutscenes carry a stigma. There is a history of many cutscenes being too long, not necessary to the story or a downright chore to watch. Many players will skip through cutscenes (if the game gives them the option to do this!) in order to "get to the game." To avoid this, you should first ask yourself this very important thing:
We'll answer that in a minute. Just as there are many ways to make movies, there are many ways to make cutscenes: full motion video, animated, flash animated, prerendered, puppet shows, and scripted events.
Full motion video (or FMV) cutscenes were popular when video games were first being published on CD media. Titles like Wing Commander III: Heart of the Tiger (Origin, 1994), Command and Conquer (EA, 1995), and The Horde (Crystal ...