What about the framerate? It's worse than the Unreal Engine. I couldn't believe it when I watched the videos on Gamersyde (best quality I've seen IMO, so it can't be the recording).
Other than that, the battles look alright (I'm so glad they picked "the music" for them as well), though I'm a bit disappointed they went back to turn-based. It looks a bit like Xenogears, which is not bad thing, but the weird thing about the battles is that you only control one character. What's up with that? Does this mean Gambits are back (heck yes if true)?
Like you said, Square better make you have more control over your party in the full version, or I don't know what to think about this battle system.
Last question, where did you acquire this demo? Did you buy Advent Children Complete? o_O
Random game thought :
Why is Bionic Commando Rearmed 2 getting so much hate? We finally get a real game and they're not even satisfied... I'm starting to hate the gaming community so f****** much...
