A major criticism of Morrowind was the lack of truly interactive NPCs, but this looks to have been improved drastically with Bethesda's new 'radiant AI' system. Basically, non-player characters now have full day/night schedules, general goals and personalities. They'll engage in non-scripted conversations with each other pulled from data in the world, and will react to you differently, depending on your character and previous actions. You can have conversations with NPCs, or just eavesdrop on them to discover new side-quests and find out valuable information. The new 'persuasion area' allows you to give your replies some attitude, so you can bully them, for example, or tell a joke - the one about the goblin and the farmer's daughter is always a winner. You can tell by the superb facial animation and tone of their voice if you've managed to win them over - or become the social equivalent of an income tax inspector.​