The SIGGRAPH panels on game development started off with Stylized Rendering in Video Games.
Three of my absolute favorite titles were used as examples in this particular panel and for very good reason; the 2008 Prince of Persia title, Mirror’s Edge and Borderlands.
Prince of Persia
Ubisoft Lead Graphics Programmer, Jean-Francois St-Amour, breaks down Prince of Persia. This specific Prince of Persia title was lauded for it’s gorgeous palette and beautiful cel-shaded presentation which is a dynamic twist from previous PoP titles. Ubisoft devs intended on creating a very stylized world with inspiration taken not from harsher elements such as “lightning” but from softer elements such as “calligraphy”. For example, the secondary character Elika’s magic attacks emit self lit calligraphy-esque trails. As for the environments, "The world had to feel integrated into nature and not built on top of it." Says Jean-Francois. Monsters on the other hand had needed to look like they were made from the black goo called “Corruption”. Funny story; the idea for Corruption actually came from an episode of Big Bang Theory where a gooey mixture of cornstarch and water seemed to have a mind of it’s own as it was bounced around from the bass of a subwoofer.
Original concept ideas for Elika actually had her as a monkey that sat on the Prince's shoulder. When the first pitch trailer was produced, Elika was then settled on being a magical female as we all know. However, the original art style had Elika looking much different with long white hair and fair skin. The Prince also looked quite different. The first pitch was turned down by Ubisoft heads critiquing that the characters and environments looked too anime. "Miyazaki-ish" was their exact description. To me it looks a lot like something from the creator of Ico.
A year later many changes were made. Black outlines around characters and objects were developed by rendering the models twice while backfacing the models. Also bias helped eliminate most of the uglier edges. For lighting, each character received specific sunlight and ambient light which is probably why there are so few human characters in the game. Finally a very aggressive diffuse ramp was also added to get the style that we see in the final render.
Shadows needed to be sharp so the devs created a white outline around the shadows. To do this, they took a composite image and added an edge filter result which created an outline, not only the shadows, but around everything. A little tweeking of the edge filter and the shadows came out great