According to the article, dynamic AI NPCs are replacing scripted dialogue trees in gaming because non-player characters now think on their own instead of reading from fixed data, making them feel less artificial than robotic in-game menus. NPCs understand their surroundings, can change their behavior, and remember player actions such as broken promises, mission failures, playstyle, and tone, creating unique playthroughs. At GDC 2026, developers showcased "agentic games" where NPCs have their own personalities and can refuse player requests, requiring negotiation rather than selecting option B. The article states that a GDC industry report said "47% of studios are already building this into their games," using a layered tech stack including local/cloud LLMs for real-time conversations, memory data frameworks for storing world events and player history, behaviour trees/utility AI for combat decisions, computer vision for detecting surroundings, and neural networks with audio AI for automatic expression.