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going off topic here but on screen encounters was also present in an old pc engine game called Dragon Slayer - Legend of Heroes II (1992) but you had to obtain an item to see the enemies on screen..

 

and before that a game called Ys (1987~1989) also had onscreen enemies

 

 

BTW if you got a japanese XBL account you can download those Magna Carta II vids off there and watch them in full screen