part of my job as a writer is to compress a lot of ideas into very few words. be it a chost, video, or indeed games!
a dialogue box in a video game only has so much room for words. of that room, there is a sweet spot of what percentage you've filled with words that helps the player read along.
too few words, and the empty space is choking, too many, and they lose interest!
The Sweet Spot is different for every game, person, situation, but it does exist. for example:
the dialogue density of a CRPG - ala pathfinder wrath of the righteous - through the ashes here, is inherently going to be higher. both by necessity, and general player expectation
you ever play a tabletop before? half that shit is players cracking jokes in-character while trying to work towards the plot- or at least a plot (sorry to all my GMs over the years)
tabletop-style RPGs in particular assume room for vamping; the dialogue is just as much flavor as it is useful, but it's up to the player to dig out said useful practical information from the fun character moments. in between dice rolls and stat checks, of course.
now, for comparison, let's look at a game with very limited screen real estate:
there's something like 32-36 characters available per line in Gen 3 Pokémon, depending on the exact iteration. some characters and fonts have more maneuverability than others.
i'd say they should've used a monospace Typeface, but the Type overhaul didn't happen til Gen 4 🥁
so you have less than 100 characters on screen at a time. to fit that pathfinder dialogue in the Gen 3 system, it would take at least 5 fully-spent boxes- far too much button mashing and scrolling to expect of the player
which means, in a limited system, you need to write with those limits in mind. think of writing dialogue for a game with a low on-screen character limit as more like... writing a poem, or a song?
you have one stanza to tell a story. that doesn't mean your story needs to be shallow!
understand your character limit ahead of time! figure out about how much will fit on-screen in-engine and work around that!
does your game have accessibility features that change the typeface, or increase the font size? maybe replaces italics with bold? you need to check for that all that too- dialogue boxes have padding for several good reasons!
and most of all: say more with less. you only have so many words. that doesn't mean you should cut all your tangents, jokes, and non-sequiturs- they should simply serve a larger purpose.
worldbuilding? giving the player hints? foreshadowing the speaker as knowing more than they let on? there's a lot of options in that limitation, if you're willing to look for them!