interesting, i didn't realise that they all did it on the fly. Thought it was still videos haha.
sometimes the video scenes seem better quality then the game lol, so assumed was all pre-rendered videos
They are in higher quality. The camera is locked in cutscenes and there's no need for AI so that frees up resources that can be used to push better graphics.
Most visible in close-ups of character models.
Some game will still have intro cutscenes that are pre-rendered but nearly everything else is real time. Most of the pre-rendered stuff looks worse than real time, simply for the fact that they have a fixed resolution and are always compressed in some way (some more than others). 720p videos can be found quite often in games that use pre-rendered videos and while that might be fine for base consoles, it will look pretty bad on PS4Pro and Xbox One X. Wouldn't happen with real time cutscenes as they will be rendered on the fly at the game's current resolution.