Basically when you engage a NPC in conversation a bar appears now you hit the button and a number is chosen much like a dice roll(we'll say between 1 and 5). now the goal is to get as close to a predetermined number (say 15) without going over.
What does the number represent? And how does 'health' come into it?
Do you actually get to read/hear the speech? That would require a lot of written content. Fighting can get away with repetition (repetitive animations, or repeated text like "you kick the spy in the balls".) Repetitiveness in conversations is sillier.
The system you describe is quite simple. (Aside from the fact that I'm not sure how it maps onto the simulated conversation.) Game combat can get away with being really simple. It can be abstracted/simplified down to
-a bunch of pre-established possible actions
-simple rules determining cause-effect relations
Real combat is much more "free-form", unpredictable, error-prone. But these concessions don't (completely) destroy the inherent interest that combat has, from the video: 'conflict and danger'. I'll go with that.
Conversations involve ideas, emotions, beliefs, desires... best simulated with human-level AI. Complex stuff. Question is, can it be simplified down, like combat, in a way that doesn't break its essential interestingness. And still be interactive, hopefully challenging...
It's my contention that:
-the free-forminess of real conversation (control of timing, tone of voice, word choice, gestures, etc.) is important
-the complexity of the cause-effect relationships is important
-this shit is hard to model (derp)
Or. We could try modelling higher level abstractions... like choosing the numerical level of 'forcefulness' to a statement. And having the 'opponent' react to that number.
From the description of your system, it looks like you've gone down that route.
I'm reminded of Balance of Power: 21st Century
. Play it to see why it doesn't work... at least it can't carry the whole game.*
Another thing: if the player is in control of his big fat mouth he has the choice of saying bad or stupid things. And you (and all your characters) will have to deal with that. And there are various kinds of badness to deal with... depending on how much 'freedom of speech' (heh) the player has. Will other characters get offended? Will reconciliation be possible? Over and over and over? Can the player talk their way into an unwinnable situation?
When a gamer fights in a stoopid way you can easily, naturally deal with that: kill him.
Simpler interpersonal interactions to try to simulate: sex, dancing, massaging, grooming, feeding. Look to... the lower animals.
*edit: I'm saying that specific game BoP doesn't work. Not saying that, in principle, the system can't. But... well...