This genre came about with the invention of laserdiscs and laserdisc players, the first nonlinear or random access video play devices. The fact that a laserdisc player could jump to and play any chapter instantaneously (rather than proceed in a linear path from start to finish like videotape) meant that games with branching plotlines could be constructed from out-of-order video chapters in much the same way as Choose Your Own Adventure books could be constructed from out-of-order pages, or the way an interactive film is constructed by choosing from a web of linked narratives.
Thus, interactive movies were animated or filmed with real actors like movies (or in some later cases, rendered with 3D models), and followed a main storyline. Alternative scenes were filmed to be triggered after wrong (or alternate allowable) actions of the player (such as 'Game Over' scenes).
A popular example of a commercial interactive movie was the 1983 arcade game Dragon's Lair, featuring a full motion video (FMV) cartoon by ex-Disney animator Don Bluth, where the player controlled some of the moves of the main character. When in danger, the player was to decide which move or action, or combination to choose. If they chose the wrong move, they would see a 'lose a life' scene, until they found the correct one which would allow them to see the rest of the story. There was only one possible successful storyline in Dragon's Lair; the only activity the user had was to choose or guess the move the designers intended them to make. Despite the lack of interactivity, Dragon's Lair was very popular.
The hardware for these games consisted of a laserdisc player linked to a processor configured with interface software that assigned a jump-to-chapter function to each of the controller buttons at each decision point. Much as a Choose Your Own Adventure book might say "If you turn left, go to page 7. If you turn right, go to page 8", the controller for Dragon's Lair or Cliff Hanger would be programmed to go to the next chapter in the successful story if a player pressed the right button, or to go to the death chapter if he pressed the wrong one. Because laserdisc players of the day were not robust enough to handle the constant wear placed on them by constant arcade use, they required frequent replacement. The laserdiscs that contained the footage were ordinary laserdiscs with nothing special about them save for the order of their chapters, and if removed from the arcade console would readily display their video on standard, non-interactive laserdisc players.
Later advances in technology allowed interactive movies to overlay multiple fields of FMV, called "vites", in much the same way as polygonal models and sprites are overlaid on top of backgrounds in traditional video game graphics.