Comment by TeMPOraL
> What would make such a system an improvement is being able to store and retrieve facts about players (HP, stats, inventory), NPCs(names, location, history), and Places(items, descriptions, inhabitants) in order to solve the needs-haystack problem. Creating a world ontology and being able to CRUD facts against such an ontology would be a game changer(literally).
Curiously, those are the exact things LLMs can't do well, and are not really supposed to. This is all stuff you (or an external system) should keep track of and supply to LLM in context "just in time". This is to say, LLMs are an important component, but alone they won't work. They need their tools :).
In short, LLMs are pure "system 1", the complete solution still needs "system 2", which fortunately is more amenable to classical computing approaches.