It is crazy today to think that playing a digital video file was a big deal back in the day, but it's easy to forget that A) these were still CDs and B) compression schemes were still not really consumer-grade yet. This is what gamers were mostly used to with full-motion video on a disc back then: usually windowed, usually half-30 (or much worse), and always chunky as hell.
And even the consumer version of a "professional" video on CD at the time (the ill-fated CD-Video, or VCD) was pretty crappy and not worth leaving VHS for. MPEG 1 running 352×240 at 30FPS (half the resolution of a VHS tape, and technically I believe half the "framerate" since I'm guessing it was stored progressive instead of interlaced for a 60Hz signal.) If you had a laserdisc, you were in heaven as a movie fan, but if all you had was a gen-1 VCD player, woe be you...