The following is a handy list of software resources designed to make writing video game dialogue easier. Each has its general benefits and drawbacks, so please evaluate them based on your own criteria.  The applications are specifically designed for writing games,  so you will note that Final Draft and other general scriptwriting applications are left off the list. This is strictly video game scriptwriting.

Chat Mapper

Chat Mapper is a new, high quality, easy to use tool for writing and testing nonlinear dialogue, especially for video games. Built from the frustration of trying to use Final Draft, Word, or even Excel to write complex branching game dialogue, Chat Mapper was built from the ground up with usability in mind.

http://www.chat-mapper.com/

SimDialog is a visual editor for dialog in computer games. The system creates dialog as a directed graph. This allows for play using the dialog with a state- based cause and effect system that controls selection of non-player character responses and can provide a basic scoring mechanism for games.This paper presents the design of SimDialog, illustrating how script writers and non-programmers can easily create dialog for video games with complex branching structures and dynamic response characteristics.

http://meaningfulplay.msu.edu/proceedings2008/mp2008_paper_54.pdf

This paper introduces a Reusable Scripting Engine to automate the generation of cinematics and cut-scenes in video games. This approach allows storytellers to provide their stories in a well-defined, structured format, which is then interpreted by our engine, along with supplemental graphic and audio content, to produce an animated presentation of the story in an automated fashion. This paper presents the design of our Reusable Scripting Engine, and discusses a prototype implementation of this design, as well as initial experiences with using this prototype system to date.

http://www.csd.uwo.ca/~katchab/pubs/loading2007_rse.pdf

Scriptease

The state-of-the-art in game scripting is to manually script individual game objects that interact in the game. Thousands of non-player characters (NPCs) and props need to be scripted before they play a part in a game adventure. This situation introduces serious concerns about programming effort and reliability. We demonstrate ScriptEase, a tool to facilitate the game scripting process. It is based on generative design patterns for automatic code generation of scripts associated with game objects. ScriptEase is intended for a broad audience, from programmers to game designers and users without programming experience. Game designers can use commonly occurring patterns to generate scripting code without any programming knowledge. This demonstration illustrates the entire process of creating and scripting game props and NPCs.

http://www.computer.org/portal/web/csdl/doi/10.1109/ASE.2004.10065

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