Personally, I prefer it when games play to their unique strength of interactivity without resorting to too many distant cut-scenes like in Final Fantasy where you really do become a spectator. It can take away from the game unless the scenes are really well thought out and acted. I still like games that do this (the Metal Gear Solid series is still one of my faves), but when it comes to storytelling I honestly see this as inferior with the video game medium.

Games like Deus Ex, Planescape Torment and Dragon Age really give you the feeling of choice and control in the story and you can decide the depths you want to explore the setting and the characters around you. It gives you the illusion of actually having a massive influence on the story even if your input is relatively small in the grand scale of things. It empowers the player to have his own personal story which can't be acheived in other passive forms of entertainment.

But even in games with a linear story, the telling doesn't need to rely heavily on cut-scenes. Half-Life 2, Portal and Shadow of the Colossus are good examples of this. They tell the story passively as you play with the setting or with the gameplay. Listening to people talking in Half-Life 2, the graffiti in Portal or riding Agro and facing the Colossi in SotC all manage to convey a story without breaking immersion through cut-scenes.

Well, that's my thoughts on the topic.

One of the thing I hate most about cutscenes is when a character is portrayed very strong in them, but in gameplay they aren't. For example in Mass Effect 2 when Jack escapes she destroys 3 YMIR mechs, these are biggest and most powerful mechs and it usually takes a good deal of bullets to bring one down, and then lays waste to a space station, going through walls like they are made of paper.

This happens quite often in Devil May Cry 4, the only cutscenes I like from are the 2 with Dante and Agnus. I also happen to dislike the puzzles from it, don't even get me started on the Giant Board Game of Doom.

I blame the overuse of cutscenes on developers wanting to be more like Hollywood, while good level design, well designed enemies and boss battles might be what consumers like, the developers want something that stands out so they go for cutscenes.

I miss the days when developers didn't take games so seriously. What happened to the exotic weapons in shooters, a gun that shrinks people and then you can squish them. Or cheat codes, I'm not talking about boring ones like infinite health and ammo, but the ones like in Age of Empires where you could have a car with a rocket launcher mounted on top fighting against archers and countless examples. Now most games don't even have cheat codes and does that have just plain ones.

1. Yes, and there is another negative side-effect, if the budget is limited and they want to do Hollywood-style cutscenes, money risks being subtracted from more vital sectors of development.

2. LOL, I liked the porkelator in Hexen, the Freeze Gun in Duke Nukem 3D, the Bio Rifle in UT, the Hornet Gun in Half-Life, bashing a skeleton or a zombie with a mummified arm or leg in Planescape: Torment and so on...

I played FFVI on the GBA so it would be 'A' ;)

I know what you mean though, myself I quite like it when the game is still quite text heavy but still has its fair share of clip scenes, the DS remake of FFIV comes to mind (even though they could have fitted quite a few more FMVs on the DS card, they kept them fairly limited) or maybe to a lesser degree something like Tales of Syphonia, Skies of Arcadia or Zelda Twilight Princess.

Also about Xenogears, I've never played it as it still hasn't made it's way over to Europe, but isn't it's second disc just like one long FMV

I really wish more games would explore storytelling weaved into gameplay, because that's basically what games are about, playing, and if the story can be told through gameplay, then that's awesome. I really want this explored more, as I'm not really happy with what has been achieved in games like Half-Life, Bioshock and Metroid Prime. I think there has been an obsession with using silent protagonists, which sucks for me at least (Yay for Bioshock Infinte!). Currently, Heavy Rain is the cream of the crop for me in this area, not only because the game is as interactive as it is, but the game and the story are connected down to every detail, FOR ULTIMATE IMMERSION! =D

Having said all that, many games do very well with cutscenes (MGS4), but I'm guessing we're nearing the loft of how well they can be implemented, based on Uncharted 2 (best use of cutscenes to date IMO). We might see small improvements, but the next big step after that I'm guessing is something along the lines of Heavy Rain, and then it isn't really cutscenes anymore.

Spoiler for Xenogears

well kind of... though it has mostly more text heavy things than FMV, The second disc is mostly the main characters describing the story with text while sitting in a rocking chair.  Which after thinking about it is worse than a 40 minute FMV imo. It has some FMV's but it's mostly short anime scenes, I don't recall one going more than 5 minutes and probably shorter than that. (I could be mistaken I don't time these things while playing), and those scenes have the worst voice acting ever. And I play lots of games with bad VA.  The second Disc is what keeps it from being one of my favorite games ever... it goes into la la land and doesn't let go imo. Sorry I got a bit carried away I guess. And I guess that doesn't convince you that it's a classic. I don't consider it either but lots of people do :P.

@everyone I guess
But I guess my point was that many people consider wordy, cutscene/text heavy games like Xenogears classics, just as people consider games like  Non-interactive with plot but immersive like Half Life 2, SoTC classics, and games like Deus Ex, Planescape Torment Classics.

Some people like all of them. Some people like watching a "movie" between fighting even if it's a bit cheesy. Some people don't.