Below the workflow for the story character's hair of C3 can be seen. Rasch's hair will be used in this example, although Clair's was done in a similar way.
First Max hair modifier was used in a try to generate the hair planes, but in the end the best result was achieved by placing the hair planes by hand (tedious but more control).
I found using a bit bigger hair plains resulted in a nicer specular falloff once in-game. Also vertex color was applied in the end to make some variations in the hair tones between hair plane copies.
We used another approach for the hair alpha. Instead of making the alpha plains more solid as to the right (C2 Lockheart's alpha), we had an approach where we tried to portray more individual hairs.
The result is a bit more grittier and detailed hairstyle as seen bellow, its also harder to see the individual hair planes.
The downside of this approach can be seen bellow. When zoomed in upon the alpha test limitations shines through, and a pixelization that is not connected with texture resolution can also be found. This worked out fine in C3 since we had control of the camera distance of the cinematic character. In the end it might just be a choice of art style what kind of approach to go for.
In the beginning I experimented with using photo referenced hair for the head texture as seen bellow. Since we were missing photos of certain angles of the actors head I had to use random people as a source, ending up with a "frankenstein" hair due with ugly seams. An even bigger issue was that the photo based hair didn't match the hair planes enough in flow and direction, and this often shone through. To achieve this this I wanted to base the head textures hair on the hair planes.
To achieve this the UV mapped low polygon head was scaled up and a light was placed inside in the middle of the skull (right picture). I then baked the shadows that the light and hair planes created together on the inside of the skull.
Two shadow bakes were done, one with hair and one without. In Photoshop the difference between these images provided an almost artifact free alpha of the hair shadows.
With this alpha map the base hair of the face texture could be done, now having the same flow as the hair planes, and no seams.
Bellow the final result can be seen. Left image is the head without alpha planes, showing the textures that was based on the baked shadows. The right image shows a screenshot with the alpha plains giving the hair volume, and depth. Notice how the hair plains hair flow in the same manner as the under laying head texture, giving a consistent look.