Big Download writes:
"The explanation or setting up of important information in a story is called exposition, and for some writers, it's a charged concept. There are few scenarios indeed where there is no need for exposition -- you will always be dropped into the middle of a situation that requires at least a cursory sentence or two explaining the location, the time, and the characters. Weaker writers tend to lean too heavily on this, over-explaining in gratuitous detail what's going on, when they should just let the scene speak for itself. If the writer does his job, there is no need for explanatory dialogue, which is tedious and unrealistic. The situation will be apparent.
The task becomes more difficult when used in a video game, which is an inherently interactive, frequently non-linear medium. The player is typically brought up-to-date via that time-honored staple, the cutscene. But is this the best mechanism to use for the job? It may be fun to get the filmic experience through a particularly cinematic cutscene, but if you want to sit passively and see people talk, shouldn't you watch an actual movie instead? We can do just about anything with video games -- isn't it time we tried something new?"