Markhavel: There's not point to bother with a pre-rendered demo as the game engine is more than enough to do the job. I don't remember well how the pre-rendered intro in the first Witcher looked it, but I'd dare say the Red Engine is close to be able to render the same thing,
in real time. The point of such games is to be played, not to sit endlessly to watch a video. If I'd wanted to do that, I'd watch some BluRay. And to put the final nail in the coffin, making such video costs money, money which has been far better spent developing the game engine and the game itself.
Well I agree to a point, the Red Engine is fantastic but nothing yet beats a pre-rendered clip. Just look at World of Warcraft as well. It's not about having endless pre-rendered cut scenes, it's just about adding a nice touch to the game. Making it a bit more special. There's also more involved in a pre-render than simply pre-rendering it. They normally spend more time on animation etc as well to give it a more cinematic / realistic feel. You even said yourself it increases costs. And this is not due to rendering time. Render farms are cheap and fast.
There's more to games than just play. It's all about how the entire package presents itself that can create desire. Some people might not appreciate this but I can assure you there are loads that will.
PS the youtube clip above doesn't do itself justice even on 720p. It looks much better in game.