The Vagrant Story devs having full control of the lighting system they had crafted for this PS1 game meant that they were able to just flex at any given moment during cutscenes.
There was no "lighting engine" to speak of, so what's happening for the bright outlines is just another 3D model of Ashley colored yellow shifted by a few pixels to give the illusion of light reflecting on him.

As for Ashley's model darkening in the shadows, I have no idea.
If you check around Ashley's hip, you can see the second 3D model following him, but it also wobbles differently because of PS1 limitations.
As some have said, I also think they just turned down the brightness on Ashley's texture to make him look he's under a shadow but I don't know if it was possible back on the PS1.
Since some people want to learn more about Vagrant Story, what's happening for the shading is that they use vertex colors for it. You can see how the textures look without and with vertex colors in this gif I made.
and yeah, I think they were able to change the coloring of their 3D model at will, since the game also had moments where they would appear in black and white
As for the way Vagrant Story was able to animate lips, they used a process they called "sub-pixel shading", subtly changing the shading of each individual pixel to give a smoother look to simulate a mouth on a flat texture.
I appreciate people saying it's something you would like to see more in indie games, Vagrant Story was still a 30+ people project that were experienced 2D artists who brought their expertise to 3D. I think some elements can be reused but others still need a budget & manpower
In any case, I am glad Vagrant Story exists to close out the PS1 in everything that was possible visually. Its limitations turned this game into a challenge the Ivalice team was motivated to overcome!
Sure!
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