"HELLO THERE!" THE DIALECT OF A TOWN NPC
The Purpose of the Town NPC
From the beginning of console RPGs, NPCs were simply made because towns existed. It would make sense to have people living in these towns to make it a little more realistic. NPCs can also act as faces for shops, resurrection points, healing spots, save points, and other such features to the player. But when those gameplay elements are either already taken up or handled in other means you are left with the task of filling up the rest of the town with people. You know, people who you can talk to, and they say stuff to make it seem like they are in fact alive and breathing. Thing about NPCs is that their dialogue is a form of interactive writing, the player may not talk to some NPCs that you put in for external reasons. There's a weird balance they you have to keep in which to make them not essential to talk to, but still interesting or useful.
This distinction is easy to ignore, most people don't even think about it when they make the town, "it's a town so there should be people in it". But at the end of the day every town NPC that contains a conversation or dialogue box should at least fulfill one or more of these criterias:
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Educate (teach the player certain game mechanics)
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Expose (provide story/lore connected to the town or world)
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Entertain (jokes, interesting things, or mini games to amuse the player)
You can combine two or all three of them or whatever, but the general idea is no NPC should be useless when interacted with. Otherwise, what's the point? Why should the player speak to the NPCs if they contribute nothing to the gameplay or experience? Don't waste the player's time. This is about as narrow as I can get when summarizing good town NPCs. So let us go into detail about these three Es.
Educate
"Did you know you can hold down X toโฆ"
Without a doubt any game can benefit from optional hints and town NPCs are a perfect opportunity to give them. Sometimes these hints are perhaps stuff the player is simply reminded of, tips on how to deal with certain enemies, or even those little things like how to sort your items properly. If you drill all those hints in some over elaborated tutorial the player may not enjoy it as much. But when a player seeks out these helpful hints she feels rewarded for taking the time to talk to NPCs and learn on her own.
The NPCs giving the tips should also be in very suitable for their environment. Is there a guard wandering around the weapon shop? Have him tell the player about weapon types! This will help the player for when she is about to wonder what weapon to pick at the buy screen. A connection is drawn, thus unifying the game mechanics with the NPCs that are informing you about them. However these given tips should not only be suitable for where they are given, but WHEN they are given. Never have a starter town NPC tell you about a feature that's introduced in the 5th chapter in the game. It'll not only be useless at the time being but also forgotten by the time the information becomes useful. Keep the information concise and connected to whatever relevant obstables the player is dealing with.
One last point about the helpful NPC, make sure their hints aren't 100% necessary to complete the game. Unless you're placing them in a very controlled tutorial, keep in mind that almost all town NPCs are optional. Anything too important might be missed. The help the player recieves should improve her knowledge of the game but not so much that she relies on it.
Expose
"The empire is limiting my shipment, it's all because of that senator whatshisface!"
Basically give the player the idea on what it's like to live in the area she's in. These NPCs are very good for filling in backstory your cutscenes probably don't detail. Alternatively they can express the lore behind the world. These NPCs are probably the most realistic as they can easily talk about personal problems that relate to what's going on. People are sometimes willing to complain to anyone, especially those grouchy old men longing for the good old days! There's also the heavy addition of atmosphere, which is something I'll get into later.
In an even more traditional sense, these town NPCs are everywhere in a lot of old RPGs. The general goal is to arrive at a town, discover town's problem, fix it via dungeon or mystery solving. Golem blocking the road to the next town? Have a traveling merchant complain about it. The mayor's gone mad? The distressed daughter can be found crying on her bed about it. Everyone turned to stone? Have theโฆ wait. Anyway you get my point. These NPCs can either provide optional lore about the game or guide the player through the story related tasks that need to be done. This is really a no brainer and largely depends on how much depth your story has or how it is told.
https://rpgmaker.net/articles/535/