Short answers, pulled from the story.
Mabel Addis designed the first cutscene in video game history in 1966. She created The Sumerian Game, which used a synchronized slideshow and audio recording to establish the setting before gameplay began.
Data East released Bega's Battle in 1983, which was the first laserdisc video game to feature animated full-motion video cutscenes with voice acting. This title used these sequences to develop a story between shooting stages.
The Neverhood Chronicles was a 1996 point-and-click title that used stop motion animation and puppets sculpted out of plasticine for its full-motion video cutscenes. This technique mirrored the game's actual worlds and characters.
The rise of CD-ROM as the primary storage medium for video games enabled the widespread adoption of live-action cutscenes. This massive storage space allowed developers to use cinematically impressive media such as full-motion video and high-quality voice tracks.
Interactive movie laserdisc video games such as Dragon's Lair, Road Blaster, and Space Ace introduced quick time events. These events required players to follow sequences to succeed at the action while prompts appeared on screen.
Director Steven Spielberg and game designer Ken Levine have both called cutscenes intrusive. They argue that making the story flow naturally into the gameplay is a challenge for future developers.