Dialogue systems vary by game and are generally custom. But they amount to hard coded if-else branches if you squint. The only one I ever wrote was a simple announcer for a sports-ish shooter.

Your question is weird. Every video game ever made has shipped using not LLMs. Not a single commercial game has ever shipped with an LLM. So I’d say what makes classic NPC systems better is they’ve shipped tens of thousands of commercial successes over 50+ years. And what makes LLMs worse is they haven’t once been proven viable for even a single title. Nor have they produced even a compelling tech demo.

Geez people.