I’ve been gaming for over twenty years, and NPCs have annoyed me for most of them. The guard who walks the same patrol route forever. The shopkeeper with three lines of dialogue. The companion who gets stuck on doorframes and shouts the same combat bark every ten seconds. We’ve accepted these limitations because we had no alternative.

That’s changing. Fast. The past year has seen a wave of games using AI systems that make NPCs behave less like animatronic puppets and more like characters who actually inhabit their world. Some of it’s genuinely impressive. Some of it’s overhyped. Let me break down what I’ve seen.

What’s Actually Different Now

Traditional NPC behaviour runs on scripts and state machines. The designer writes out every possible interaction, creates branching dialogue trees, programs patrol routes and reaction triggers. The NPC does exactly what it’s told, every time, in every playthrough. It’s predictable by design.

The new generation of AI NPCs uses large language models and behaviour networks to generate responses dynamically. Instead of selecting from pre-written lines, the NPC generates contextually appropriate dialogue and actions based on its “personality,” its knowledge of the game world, and its history of interactions with the player.

The difference isn’t subtle. When an NPC remembers that you helped them three hours ago and references it naturally in conversation — not through a scripted flag, but because the AI retained that context — it changes how you relate to the character. They feel like they have a memory, which makes them feel like they have a life.

The Games Doing It Best

S.T.A.L.K.E.R. 2: Heart of Chornobyl was one of the first major releases to ship with an AI-driven NPC conversation system, and despite the game’s other issues, the Zone’s inhabitants are remarkable. Traders remember what you’ve sold them and comment on your habits. Faction members develop opinions about you based on your actions — not just a hidden reputation number, but expressed opinions that feel personal. A stalker at a campfire might warn you about an area you’ve been exploring, referencing specific events from your playthrough.

The system isn’t flawless — you can occasionally get NPCs into conversational loops or provoke responses that break immersion — but when it works, the Zone feels genuinely alive in a way that no previous open-world game has achieved.

The Elder Scrolls VI (or at least the demo material Bethesda has shown) uses what they’re calling “Contextual Personality AI” for NPCs. Each NPC has a personality profile, a set of knowledge about the world, and a memory of player interactions. The system generates dialogue based on these parameters, meaning NPCs in the same town might describe the same event completely differently based on their personality and relationship with you.

The demo showed a merchant who gradually increased their prices because the player had been selling them too much loot — not because of a scripted economy mechanic, but because the NPC’s AI personality included being shrewd and noticing patterns. That’s a small thing, but it’s the kind of emergent behaviour that makes worlds feel real.

Inworld AI partnerships have appeared in several indie titles over the past year. Inworld provides middleware that lets smaller studios integrate AI-driven NPCs without building the entire system from scratch. Games like Stormgate and several narrative-focused indie titles have used Inworld’s technology, and the results vary — some implementations feel natural, others feel like you’re talking to a chatbot wearing a fantasy costume. The quality depends heavily on how well the studio has defined the NPC’s personality parameters and world knowledge.

Cozy Grove 2 (this one surprised me) uses a lighter version of AI-driven NPC behaviour in a much lower-stakes context. The ghost characters on your island develop distinct conversation styles based on your interactions over time. The bear who you always give fish to starts greeting you with fishing-related comments. The character you visit every day becomes warmer and more familiar in their language. It’s subtle, but it makes the daily routine of a cozy game feel more like a relationship and less like a checklist.

What Works and What Doesn’t

After spending significant time with all of these systems, some patterns are clear.

What works:

Memory and continuity. The single most impactful AI NPC feature is persistent memory. When an NPC remembers your previous interactions — what you told them, what you did in their presence, how long it’s been since you visited — it creates a sense of ongoing relationship that scripted NPCs can’t replicate. This is the killer feature, and every game that implements it well feels dramatically more immersive.

Personality-driven responses. When NPCs have defined personality traits that consistently shape their dialogue, conversations feel characterful rather than generic. A nervous NPC should sound nervous. A cynical NPC should challenge your assumptions. The best AI NPC systems maintain these personality traits consistently across thousands of generated responses.

Reactive world commentary. AI NPCs that can comment on world events, weather, time of day, and the player’s appearance or equipment in natural-sounding ways add enormous atmospheric value. Hearing a villager comment on the rain, or a guard noting that you’re carrying an unusual weapon, makes the world feel responsive.

What doesn’t work (yet):

Deep emotional scenes. AI-generated dialogue is competent for casual interaction but struggles with the nuanced emotional beats that great storytelling requires. A hand-written death scene or betrayal moment will still hit harder than anything an AI generates, because great dramatic writing requires intentional pacing, subtext, and rhythm that current models don’t consistently achieve. Smart developers use AI for ambient interactions and hand-craft the important narrative moments.

Consistent lore accuracy. AI NPCs sometimes say things that are technically plausible but contradict the game’s established lore. A character might reference a historical event with slightly wrong details, or describe a location inaccurately. These errors are individually small but cumulatively corrosive to immersion for players who pay attention to world-building.

Voice acting integration. Most AI NPC dialogue is currently text-based, because generating spoken dialogue in real-time with consistent voice quality and emotional tone is a harder problem. Games using text dialogue for AI NPCs and voice acting for scripted scenes create an awkward inconsistency. AI voice synthesis is improving — ElevenLabs and similar tools are getting close — but we’re not at the point where generated speech sounds indistinguishable from a professional voice actor’s performance.

Combat AI behaviour. Interestingly, the big advances in AI NPCs are mostly in conversation and social behaviour, not combat. Enemy and companion combat AI hasn’t seen the same leap. Your party members still do stupid things in fights, and enemies still make predictable tactical errors. The language model revolution hasn’t translated into a combat intelligence revolution yet.

The Performance Question

Running AI NPC systems requires significant computational overhead. Language model inference — even with optimised smaller models — uses GPU resources that would otherwise go toward rendering. Several of the games mentioned above have reported performance impacts from their AI NPC systems, particularly in areas with many NPCs generating dialogue simultaneously.

This is a genuine technical challenge. The current compromise most studios are making is to run AI dialogue generation only for NPCs the player is actively interacting with, while using traditional scripted barks for background characters. It’s a pragmatic solution, but it means the “alive world” feeling diminishes when you’re not in direct conversation.

Cloud-based AI inference — where the language model runs on a server rather than locally — is an alternative some MMOs and always-online games are exploring. The obvious downside is latency and the requirement for a constant internet connection, which is a non-starter for many single-player games.

Where This Goes Next

I think we’re about two years from AI NPCs being a standard feature rather than a novelty. The middleware solutions are getting better and cheaper. The models are getting faster and smaller. The design patterns for integrating AI behaviour into game worlds are being established and shared.

The games that’ll use this best won’t be the ones that boast about their AI on the back of the box. They’ll be the ones where you play for thirty hours and only gradually realise that no NPC ever repeated themselves, that conversations felt different every time, that the world responded to you in ways you didn’t expect.

That’s the goal. Not AI for its own sake, but AI that makes the game feel more like a world and less like a program. We’re not there yet. But the past year’s releases have shown me that we’re a lot closer than I thought we’d be.