Any graphics have to be rendered before they can be shown on screen. That’s the process of doing all the calculations for what shows up from your camera angle, the lighting, etc. and turning that data into a 2D image.
Your video game has to do this in real-time, every frame, according to your inputs. To accomplish this, the game has limits on how nice the graphics look, to cut down the number of calculations needed. But for a cutscene, this can be done in advance by the game creator, and since it doesn’t need to be done in real-time, the graphics can look really nice. Only the final rendered video ships with the game, none of the rendering is done on the console. So cutscenes end up looking better than the console graphics usually look
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