Arcade machines, despite hardware limitations, employed clever techniques to simulate dynamic NPC relationships based on player interactions. These systems primarily relied on state machines and flag-based tracking to create the illusion of responsive character relationships.

The core mechanism involved relationship variables that would increment or decrement based on player choices during encounters. For instance, helping an NPC in a beat-em-up game might increase a hidden "friendship" counter, while attacking them would decrease it. These values would then trigger different NPC behaviors in subsequent interactions - merchants might offer discounts, allies could provide assistance, or enemies might become more aggressive.

Many arcade games used branching dialogue systems with limited options. Games like Dungeons & Dragons: Tower of Doom implemented conversation trees where player selections would directly impact NPC attitudes and available quests. The system would track key decisions through simple flag variables, locking or unlocking certain relationship paths.

Memory constraints meant these systems operated within strict boundaries. Games typically allowed only 3-4 relationship states per NPC, often represented as hostile, neutral, friendly, or allied. The transitions between these states were carefully scripted to maximize perceived depth while minimizing computational overhead.

Some fighting games like Soul Edge/Blade implemented rudimentary relationship systems through arcade mode storylines. Character interactions would change based on fight outcomes and special move usage, creating unique rivalries or alliances that carried through the game's narrative sequences.

The illusion of complexity was often enhanced through clever repetition and contextual triggers. An NPC might have multiple pre-scripted reactions to the same relationship level, creating variety without additional programming. Environmental factors and player status would sometimes modify these interactions, adding another layer of perceived dynamism to what were essentially predetermined response patterns.