Well, in games, as you say, it is expected. That's part of the base concept. You're the protagonist, the mover of the story. It's part of what interests me in the story. In a TV universe or film that is a little bit different. It can work on the same rules, but there is also a sense of a living, breathing, world. Well, if you create this large world, but then constantly have people knowing everyone else it strains belief to a degree.See, I find small-universe doesn't bother me so much in games, because it is a game and I somewhat expect it. This is especially true in RPGs, where there is foreshadowing certain important someones that you get to meet up with later during the game, and I find that depending on the game and the backstory, this can actually be quite effective.
It can be very effective in a game, but distracting in a film series.