I received a lot of positive feedback when I posted some test footage with 'prerendered backgrounds' earlier this month. It was positive enough, in fact, to put have me reconsider how much research and development time I should be putting into backgrounds.
I am still not fully satisfied with my process, but a lot of progress has been made in the last 2 weeks and I wanted to share the current workflow, as in flux as it is. I want small indie teams to feel like this aesthetic is achievable as much as anyone.
The first stage is a very rough 3D blockout of the planned scene. Major camera obstructions or geometric features are covered here. No effects or interactables. Only the 'canvas' we want to paint. You don't have to go crazy with detail, that's for painting later. The most important thing is getting the your colors and textures in the right ball park.
An image of the unlit scene is then saved from the desired angled and brought into a painting program for paintover (Clip Studio Paint for me). This can get extremely time consuming, but for me this was made easier by the fact that my game resolution is only 640x360. This makes painting and photobashing the background extremely forgiving. I encourage restraint on the size of the paintover.
You can optionally overlay your lighting once you've lit the scene, but keep in mind that if you 'bake' lighting into the paintover, realtime lighting changes will look very odd later.
A decal projector is then affixed to the camera with the paintover layer applied. We project the paintover onto our 'canvas' objects only. The result will stand up to MINOR rotation, but with only a single paintover you're best leaving the camera static. See below at how it begins to break down.
It is completely 'reasonable' (depending on the size of your art team) to bake these textures back onto their albedo maps, paint the same scene 2-4 times from different angles, and get scenes that look this pretty in full rotational 3D. I haven't done this yet (still only one person)!
Afterwards I added some vertically oriented billboards for decoration which are convincing enough at this scale, effects like water, and the scene interactables. Because the textures are projected spatially on the scene, reflections work too.
None of this is final, but I hope it was educational. I'd really love to see more PS1 JRPG inspired projects in the future.