> I think any NPC with dialogue important to a goal (a quest, a tutorial, etc) is going to be hard to use generative AI for. It not only needs to be coherent with the story, but it needs to correctly include certain ideas. I.e. if the NPC gives a quest to go find some item at some location, it needs to say what the item is and where it is.

That was my experience when I was experimenting with using current LLMs to generate quests. You can of course ask for both a human-readable quest description and also a JSON object (according to some schema) describing the important quest elements, but the failure rate of the results was too high. Maybe 10% of quests would have some important mismatch between the description and the JSON; the description would mention an important object but it would be left out of the JSON, or the JSON would mention an important NPC but the description wouldn't, etc.

As a player, I think it would get frustrating quickly if 10% of quests were unsolvable, especially since, as a player, you don't know when a quest is unsolvable; maybe you just haven't found the item/NPC yet.