People are talking: video game bad guys are uninspiring and boring!
Everyone's got a theory. Welcome to mine. My theory is simpler than their theory. My theory is this:
Video games focus on the player.
The key step to making any character come alive is developing them. However, video games have a very focused "presence": your character. It is rare and disconcerting when a video game ships itself off to the other end of the universe to suddenly be from the bad guy's perspective.
Think about all the best villains in video game history. The game almost certainly went to absurd lengths to develop the villain, to give them screen time.
In System Shock 2, the ever-memorable SHODAN was an incessant voice in your head, doling out rewards and ad-ad-ad-adviiiiiiiiiiice, insect. In FFVI, Kefka was continually tromping up and down the world, and every time you saw him, he was packed with (A) world-changing goodness and (B) comedic dialogue. In FFVII, Sephiroth showed up in a huge number of cutscenes and flashbacks, making him more commonly present than many of the party members.
There are lots of ways to do it, but it takes effort. Games aren't movies: cutting away to a situation on the other side of the planet feels strange to us. However, that's far from the only way to develop a villain!
Perhaps I can talk about some of the ways, later. Fun times!