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Lethn The big thing for me is that I need to have the villagers be interactable
This was done in The Sims (2-4). By the way, in The Sims 3 there can be several hundred residents.
MartinSenges But I think individual character movement is something you want to avoid with that system anyway.
The implementation of crowd movement is done in anima, there you can see that the residents walking in the same direction have different speed. But I do not know what technology they used and whether it is possible to apply it in games.
The optimization section mentions multithreading.