The “mind-boggling” thing for me is how often games get it terribly wrong, almost as if no thought was put into the design.
Disregarding that, it’s more often than not that getting rid of the problem is better than trying to solve it. The complexity of the game state is mostly an illusion.
Ever seen respawning loot? You might think the game is “doing” the respawning, but actually it simply returns to the state it already knows – the game world when you start. It only keeps track of what you might have looted recently, and then simply “forgets” all of you interaction. So any container you have looked at recently will have a fixed inventory that needs to be saved. But all the others are just labeled like “junk”, “basic”, “boss” and will generate their actual content on the fly, when you access them. So there’s nothing to “save” about them.
Possibly simpler example of the same idea is lootable enemy bodies. The base state is that there are none, no bodies anywhere. The game might pretend that there are some, like bodies is a zombie game, but they are just as fixed as the actual “boxes”, it’s just a different paint over a container.
Whenever there’s a fight the game will remember a couple of new boxes, but there’s a limit on that and it will “despawn”, or forget, any information beyond what the base state of the world is.
Same for enemies. Instead of keeping track of every single enemy in the world, the game will “spawn” entities when you enter a certain area, just like it did when you looked at a loot box. So a game save might keep a couple of them, but when you come back to an area hours later you will find the enemies have “regenerated”, or more accurately, reverted to their base state.
When it comes to quests it’s often important to actually design the quest around the need to keep track of the progress. Fetch quests are not only simple to think of, they are also really easy to keep track of. That’s part of the reasone why you see so many of them. Same goes for other completely linear quests, although here’s where it boggles my mind that people get it wrong and either skip sequences or manage to soft or ever hard lock the game.
TL;DR: The game state is not that complex.
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