What led to the decision to include cinematics in Torchlight II?
It was really two things that led to the decision to include cinematics in Torchlight II.
One, we simply had the time and budget for it this time around… things that were in short supply for the first game.
Two, we were very aware that the story was an area where we could improve upon Torchlight greatly in a sequel. Like I said, we didn't have a whole lot of time to invest into properly setting up, fleshing out, and delivering a particularly engaging story for the first Torchlight. We had a lot of our backstory and key points mapped out "in our heads" (we have a collective hive mind), and we tried to hint at greater things where we could, but it wasn't necessarily translating into a narrative. We wanted to make sure we addressed that for Torchlight II.
We're still not making a "story game", but I think we do a much greater job for providing context and motivation with Torchlight II.