Microsoft Xbox and Inworld AI Partner up to Empower AI-Based Character Dialogue and Quest Creation

Another day, another AI toolkit to write video games.


  • Xbox and Inworld AI team up to use a fresh AI toolkit.
  • The toolkit aims at enhancing NPC dialogue and quest lines.
  • This adds to the controversy surround AI integration in game design.
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A recent partnership between Xbox and Inworld AI plans to be the next step in gaming curated by AI. Microsoft aims to make use of an AI toolset that assists and empowers developers and designers in creating dialogue, story and quest design.


In its official blog, Xbox makes it a point to include further terms like generative AI, and Azure OpenAI Service in order to elaborate upon its new vision for empowering AI to create important aspects of game design.

What’s the Xbox Partnership All About?

Xbox Inworld AI
The partnership between Microsoft Xbox and Inworld AI could change the way games are written.

Xbox starts off their announcement by telling us about how procedurally generated worlds an important aspect of the future of game design are, as they introduce key components like replayability and endless variability.


They are partnering up with Inworld AI, which specialises in a fully integrated character engine for AI NPCs that helps craft different characters with unique personalities and contextual awareness. According to Xbox, this partnership will bring Inworld’s expertise when working with tools like generative AI and Microsoft’s cloud-based AI solutions. This includes Azure OpenAI Service and Microsoft Research’s insights into the future of gaming. Furthermore, Xbox’s talents in working with accessible and responsible creative tools. 

They elaborate on the outcomes of this relationship:

At Xbox, we believe that with better tools, creators can make even more extraordinary games. Today, we are announcing a multi-year partnership with Inworld AI, an M12-portfolio company, to build AI game dialogue & narrative tools at scale.

Finally, the partnership will be able to bring out accessible and responsibly designed multi-platform AI toolsets that have the following objectives:

  • The toolkit will be an AI design copilot that helps designers explore new ideas. This includes prompts that turn into dialogue trees, quests, and detailed scripts, among other things.
  • The toolkit makes use of an AI character runtime engine that gets directly integrated into the game client. This allows for creative experiments with novel narratives, quests, dynamic stories and dialogues.

Conclusively, Xbox words its philosophy with three principles – empowering people/organizations, meaningful innovation and responsibility. 

An AI Integration May Be Useful, but Also a Little Concerning

Inworld AI
According to a study conducted by Inworld AI, 99% of gamers think AI will enhance gameplay.

Undoubtedly, generative AI is a useful tool for creators looking to build games faster and never having to worry about menial tasks that require a lot of their time. However, writing quest lines, dialogue and creating characters has always been a sensitive topic that often defines a game’s narrative experience.

In a Reddit post about the partnership, comments have mostly been negative about an AI toolkit ‘taking away’ an artist’s job. One of the comments reads:


Can’t exaggerate how miserable does this sound. My blood boils just thinking of meaningless quests and characters that only exist to fill an empty map with “content”. Where narrative doesn’t coexist with gameplay as a symbiotic relationship, but only as a means to an end.

Comment by user EgoLikol

Video games today are bold attempts and blending massive worlds with intricate characters, and it’s often hard to spot what’s truly generated by AI and what isn’t. With open worlds, especially, players often find themselves running into monotonous quests and character stories that lack any kind of depth. This takes away from the player experience and makes worlds seem ‘bland’, with shallow writing. 

Not long ago, Ubisoft too came up with a ‘Ghostwriter’ tool that writes NPC dialogue, which received its fair share of backlash in online communities.


It won’t be surprising to see something similar with Xbox and Inworld AI’s partnership too. 

Whether or not this will be improved by fancy partnerships and visionary tools is something time will tell. So far, tools like this promise more than what they can truly deliver, and players often expect a game world (and its character) to be realistic, relatable and reliable. 

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Written by Tanay Sharma

Articles Published: 416

Tanay wears more hats than Red Dead Redemption 2 characters. He's a musician, writer, voice-over artist and adores interactive media. His favourite games are the ones with memorable stories and characters. He's pursuing a master's degree in Behavioural Sciences. No, he won't read your mind.