Extended reality offers unique ways to create mediated spaces that enhance and help popularize experiences across several domains, including entertainment, creativity, and culture. There are still issues that hinder the widespread adoption of the medium, such as the over-reliance on scripted sequences, generalized approaches, and curated asset production. Artificial intelligence can be used to, in part, alleviate these issues, but this comes with its own set of challenges, such as factual inaccuracy or hallucinations. We delve into prompt engineering methods for the GPT API, enhancing context understanding to enable more realistic performances in historical event recreations. Specifically, we experiment with the Great Fire of Smyrna in 1922 as our historical context, situating the AI agent in the middle of chaos as a resident that has been affected by the event. Our experiments demonstrate that refined prompt engineering techniques significantly reduce factual inaccuracies and enhance the emotional resonance of AI-generated dialogues, which can lead to more immersive and engaging XR experiences. Our experiments indicate that AI can effectively support historical recreations by providing dynamic and contextually appropriate interactions.
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