duffer said:I think most Xbox games use Bink and/or WMV for their FMV.
Divx is great for distributing video (typically commercial DVDs copied without permission) over the Internet, but it's not a particularly good codec for video games. It's not terrible, just nothing special.
(A good video game codec is high quality, low cpu overhead and low ram footprint. High compression ratio isn't as important, because DVDs are huge.)
DivX doesn't make sense for Xbox or PS2 because like you mentioned they both use full size DVD media which can use something like MPEG2. However for GC's limited MiniDVD format it makes perfect sense.
Also cpu overhead is only relevent for video codecs because PCs can have multiple programs and windows open. On consoles FMV is fullscreen so the cpu overhead argument doesn't hold water
On GC DVD quality at 1/7 the file size makes perfect sense.