There is no video codec involved with CryVideo. This is because the CryEngine doesn't understand any kind of video codec right out of the box besides Scaleform Video (usm) and implementing a new one is not an easy task, because of some missing functions and many codecs are protected by copyright.
So Cry Video just uses a sequence of strong compressed dds images. You can either use the batch mode of the resource compiler or my new script for GIMP to do this in very short time.
The work flow looks like this:
1. Create your video file (avi, wmv etc.) with video and sound data.
2. Use a program like RAD Video Tools, which separates the audio and video stream. Then you have all the images as TIFF files (RAD automatically numbers them from 1 to xxx) and the audio as a wave file.
3. If you want to use your video on startup, convert the audio file with a tool like Audacity to OGG. For ingame videos to MP2 or MP3 and just change the extension to MP2.
4. Use the batch mode of the rc.exe or my script for GIMP, which converts and compresses all the images to the CE3 dds format in very short time.
5. The images will be compressed again when you create the pak file for it. Then it is a reasonably size.
6. Create a xml file for your video containing all the necessary information like the first and last number of the sequence, FPS, Width, Height, etc. Sample files are included.
7. Use your video!
CryVideo will play the images with the FPS number you specified and automatically syncs the playback to the audio file, so there is no inconsistency between the video and audio stream.
And of course you can choose any resolution, FPS and quality of your input video, there is no real limitation. However, any increase of the quality also increases the file size of the images in the end.
I recommend 720p @ 30 fps for fullscreen videos. Ingame movies on surfaces should also work fine with 360p, unless your screen is very big
The CryEngine automatically upscales the images, when the player uses a bigger resolution then the video.