As the video game industry was emerging from its niche status into the mainstream—by 1994 it was two-and-a-half times larger than Hollywood by revenue—Hollywood began to make inroads into the growing market.
Soon thereafter, video game heavyweight Electronic Arts featured well-known Hollywood talent such as Mark Hamill, Tom Wilson and John Spencer in their critically acclaimed titles Wing Commander III and IV, setting the stage for a more expansive tie-up between the movie and video game industries.
Bega's Battle, Cliff Hanger and Firefox reused footage, while titles like Space Ace, Time Gal, Thayer's Quest, Super Don Quix-ote and Cobra Command were entirely original.
RDI Video Systems (Thayer's Quest) had branched out into making a home console called the Halcyon, but it failed and they went bankrupt.
American Laser alone would go on to lease almost a dozen Laserdisc games over the next few years and many other companies again rushed to release titles using the technology.
With the rise of 3D graphics and the introduction of hard drives and CD-ROMs to arcades, the large, expensive and small-capacity Laserdisc could not compete and disappeared.
While CDs would see some use in the mid and late 1990s, it was hard drives, GD-ROMs and DVD-ROMs that caused the largest jump in FMV use in the arcade.
This gave rise to a slew of original FMV-based computer games such as Night Trap (1992), The 7th Guest (1993), Voyeur (1993), Phantasmagoria (1995), and Daryl F. Gates' Police Quest: SWAT (1995).
Regardless of their sources, these FMV games frequently used B-movie and TV actors and promised to create the experience of playing an interactive movie or animation.
The personal computer was rapidly evolving during the early-to-mid 1990s from a simple text-based productivity device into a home entertainment machine.
Gaming itself was also emerging from its niche market into the mainstream with the release of easier-to-use and more powerful operating systems, such as Microsoft's Windows 95, that leveraged continually evolving processing capabilities.
A part of the machine's hardware was a dedicated M-JPEG processing unit which enabled far superior quality relative to other platforms of the time.
This is primarily due to graphical advancements in modern video game systems making it possible for in-game cinematics to have just as impressive visual quality.
Consoles, on the other hand, either used a third-party codec (e.g., Cinepak for Sega CD games) or used their own proprietary format (e.g. the Philips CD-i).
Ghosting and distortion of high-motion scenes, heavy pixelization, and limited color palettes were prominent visual problems.
Wing Commander III: Heart of the Tiger was one of the most significant FMV titles made in 1994, featuring big-name Hollywood actors.
Wing Commander IV was also the first game to have used actual film (rather than video tape) to record the FMV scenes which attributed to the ability to create a DVD-quality transfer.
Sony included optimizations in their hardware for their MDEC (motion decompression) technology, and Sega chose the software route.
While Duck's offering won praise for its quality (showcased in games like Enemy Zero, major Launch titles in the US and the Saturn adaptations of console hits from the Sega AM2 arcade group) the opaque licensing and royalty structure impeded widespread adoption outside of Japanese and larger US developers.
Duck's TrueMotion technology was extended to the PC and Macintosh as well, showcased in the high-profile Star Trek: Borg and Star Trek: Klingon, The X-Files Game, Final Fantasy VII, and the highly anticipated sequel to Phantasmagoria, Phantasmagoria: A Puzzle of Flesh and other titles.
DivX is used in several GameCube games, including Star Wars Rogue Squadron III: Rebel Strike.