I don't know about Xenosaga implements cutscenes, but I can't imagine that it could be like this. The end of Act 1 came out of nowhere. The last act perhaps the worst. You beat a boss and got such a potentially great item, and you have no one else to use it on. The scene before the last boss fight was a major offender to me as I sat there and watch and said to myself, "It really ends like this? Am I really just going to sit here and watch it?"
And that, to me, is a major problem. Cutscenes should be advancing the story. They should not be where most of the action is taking place. In a game, the action should actually be in your hands.