I suggest you read the Wikipedia article about it, Sierra really went all out on Phantasmagoria. It was budgeted at 800k, but eventually cost $4.5 million, with the custom built studio solely dedicated to filming it weighing in at $1.5 million - thats quite something, considering we're talking 90s money here. Again, dev costs for AAA titles today are a completely different beast, but as you said, video games have come a long way since then.

I watched a (much longer) complete walkthrough sometime last year when I was down with the flu or whatever and I have to say, re-watching it is a bit more fun than re-playing it, the pacing was quite a bit off.

Roberta Williams is a good enough writer when it comes to early adventure games (I do love King's Quest), but this was her first horror project, her script was maybe overly long and the project too ambitious in places, and yeah, the complexity of plot lines probably have grown along with the expectations and the maturity of the audience.

It's still a great project and a major milestone as far as FMV games are concerned, a genre I somewhat miss overall. The mixture of animation and real footage using 90s technology has just the right amount of schlock/cheesiness to be highly entertaining.