Found me password!
If you're talking about movies that enhance the environment, stuff that plays as the player, er, plays: this is how we are doing things like water, wind, etc. (also how the windmill in PoG is done I guess)--
Create your animation. Save it as a sequnce of frames. Use the CS animation editor to create an animation with these frames. Place the animation in the appropriate layer on your map. Use .pngs as the frames to make the animation translucent for rain and water effects. You can make some pretty smooth environmental effects with CS. Yay.
Create a movie. (.mov) Now create a dialogue event with NO TEXT. Just the movie. The event will freeze everything, play the movie once, unfreeze everything. Caution: the movie is just thrown on the screen, with everything (map, etc) visible around it. Include a teleport to and from an all-black screen with the dialogue event for a more professoinal transition.
As far as how to create the .mov--yes, most 3d programs include a way to make movies. QT pro is a cheap and effective way to make cell animation by assembling sequnces of pictures. People with budgets or generous parents can go for an animation or video editing program. Our animator is using Animation Stand (www.animationstand.com), and he loves and recomends it. It simulates every aspect of a traditional cell animation studio.
Animation is rough. But keep this is mind: even a mov of simple fade transitions from one picture to the next (or just scrolling text) with appropriate background music can really do alot to pull a player into a game, and, if done well, can set the mood infinitely better than a click-to-continue intro story. The PC game Thief has good examples of simple cutscenes done well. QT Pro is $30. CS supports QT. Think about it.
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