Joystiq found a complete run-through of the 1980s game Dragon’s Lair up on YouTube that’s worth a look (there’s also a run-through of Space Ace that shows up on the YouTube page). The game was fully animated (by Don Bluth, who made American Tail and Land Before Time), but because of the sophisticated look it wasn’t much of a game. You move the joystick or hit the sword button when light prompts flash, and don’t actually control anything. Plus the sequences are each very brief and progress randomly.
Every time I see Dragon’s Lair mentioned, I wonder when we’ll ever see a game that looks so good but is actually playable. Cel-shaded games like The Legend of Zelda: Wind Waker and Sly Cooper are a step in that direction, but they’re nothing like playing an actual cartoon. I’m really looking forward to Okami, which looks like hand-drawn Japanese art, but that’s also a cel-shaded game.
Are there any animators or gaming folks out there who can say what the technical challenges of a fully hand-drawn animated game are, and if those difficulties will be overcome anytime soon? Are the Xbox 360 and PlayStation 3 powerful enough to support hand-drawn video games? Do we have to wait until the next next-generation? Will there ever be a hand-drawn game, given that even Disney has stopped making traditional animated movies? That would be a shame if we finally reached a point where the technology can support a true cartoon game but nobody bothers to try because 3-D animation is so dominant.
— April 18, 2006
Korr Values 
Hi. I will be working on a game that is like Dragon’s Lair.. only there will be multiple paths and variable time occurence of events; in other words, you will never get the same game twice and there will be no memorization.. it will be based purely on reflexes. It will be fully animated and created in Flash.