We're four days away now. After a year of pre-publicity and a five-year wait since GTA IV, the latest instalment in Rockstar's gangland opus is almost upon us. Featuring a game world larger than than any other title in the series, hours of cinematic sequences and a truly epic cast of crazed characters, Grand Theft Auto V has a scale and ambition that exceeds most triple A development on the current consoles. Indeed, people are already calling GTA V the first next-generation video game.

Last October I travelled to New York to get one of the first demos of the game. While there, I met Dan Houser, co-founder of Rockstar and co-writer of the Grand Theft Auto titles. There, I asked him about the process of building a new GTA from scratch, and how the different parts of Rockstar North combine to allow its complicated interplay of story, side-missions and sand box freedom.

In the first part of that interview, he tells us about the creative process, about how the characters are written and how they are brought to life; and about the complexities of marrying narrative and gameplay in such a large adventure.

Part two follows on Monday.

How do you begin a Grand Theft Auto game? Are you always thinking of the next one?

We don't see it as a production line in that way. We have a lot of guys on the team – it's not like a freelance unit that gets taken down and put back together again, so of course, when it finishes we do need to roll on to something fairly quickly, but there's a certain amount of downtime. Not till the very dying embers of this will we give the next one a moment's thought. And that's if we're going to do another one – we always said that if we couldn't think of something interesting to do then we'd stop – for this or Red Dead, but particularly for GTA. As much as anything they are a response to what we think went well or what we could do better or what could be different from the last one.

GTA IV felt like a real change in direction – or at least a maturation – for the series…

After San Andreas, with the move to high definition, we really wanted it to be focused and very tight – apart from anything else, we couldn't do any more than that – because of the complexities of just making an HD game at the time. This time, we wanted to make something very broad in scope because we have a bit more understanding of the tech and we wanted to use that to put a big landscape in there and lots of outdoor aspects to it. That was the first sliver of a concept.

And how do things usually progress after the first kernel of an idea? How do you decide where to go next?

I think it's Sam [Houser] and Aaron Garbut who decide… they'll certainly discuss it with Leslie [Benzies, producer], myself and a few other people, but it's between the two of them – Aaron especially because he has to plan it and build it. Sam gets really heavily involved in that early stage of where it's going to go. For GTA V, they were keen on LA for a bunch of reasons but in particular because we hadn't done it properly. We made San Andreas, but LA was only a tiny bit of that – it was a section of three small villages linked together by some cool countryside – so we felt that we could do something that was very different. Having a developer in San Diego and business in LA all the time, we all go over there at different points throughout the year – it's a city we know very well and feel we haven't done justice to. We felt we could do something very fresh and new there. So the very first decision is the place. LA gives us the countryside around Southern California, which is spectacular and good for the kind of game we wanted to make. You get the mountains, the desert – that seemed very appealing.

And what do you think about next?

On previous games, the next thing has been the character and the reason why they're in the world and what we're going to do with them in the world. That's the normal process – and alongside that, a feature set of things we want to do differently and things we want to improve. This time, we thought about Niko and John Marston: they're kind of single-player odysseys for want of a better word. They were so epic in scope. We thought, what can we do with one player that's better than that? Who, as Franklin, are you most likely to want to follow or believe or not believe? That process began to set the story in motion and the narrative evolved out of the characters' past and their future. As soon as we had those characters, that side of the game came together fairly organically – as it should do. Every time we get the lead character and what their reasoning in the world is, if we're doing a good job and it's the right thing, the rest of it… I mean, maybe the ending needs some work and some of the things driving it forward – but the overall feel of the story should feel very organic to us. If we get that feeling, we know we've got a story that people are going to find compelling.

Grand Theft Auto V's appeal, and that of the rest of the series, is as much to do with the extracurricular detail that creates a world full of diversions, say fans. Photograph: Rockstar

Do you feel receptive to influences during this period? The first few GTA games felt cinematic. It felt like you were channeling movie culture – has that changed?

I think we tried to move away from that, quite consciously, after San Andreas. That was for a bunch of reasons, but I suppose primarily we felt that we wanted to say something that was not speaking about movies but about the wider media world. And also, when you're making something about the 80s, you want to talk about 80s media as much as anything else, but with something about 2008 or 2013, I believe we're as equipped to say that as much as anyone else. It no longer felt relevant to us to [pastiche movies]. We'd had a good experience doing that but it was time to move on and do our own thing.

Where do you think games sit in terms of modern culture?

I don't know, you tell me? Where do you think they sit?

Well, it seems to me that because they are interactive and the way we live now is very fast and hyper social, they better reflect our lives than linear media. I think they're the natural story-telling medium of this century. How about you?

I think that's a very interesting idea and I hadn't really thought about it in those terms. I wouldn't necessarily have the confidence to think in those terms – but you should as a games journalist because it's up to people like you to push those theories… It's up to us to make the best stuff we can make – it's not necessarily up to us to shout from the rooftops about how clever we are, how progressive we are, or how sophisticated we are. It's our place to make stuff that's as good as it can be.

And I suppose we're not really seeing the limitations in games… movies have limitations as a storytelling medium and so do games, but the limitations are different. Our job is to be aware of the limitations, find the strengths, and work toward those strengths. And I think as we get more experiences and the medium gets more mature, we do a better job of achieving that. That's not to say that games are perfect or flawless, it's still a very, very young medium.

Look at the evolution of our games from GTA 2 to GTA 3, through Red Dead. I'm not saying we do a good, bad or indifferent job, I'm just saying there's a clear evolution in technique, if not in talent – the technique at least has clearly moved on. In terms of what we're doing, our understanding, and the technology needed to support that understanding, the way that story and missions and off-mission stuff in the open world games all interplay – it's getting more sophisticated, that's definitely the case. We are hopefully treading ground that hasn't been trodden before and finding a better way of treading it each time. And I don't just necessarily mean as writers, but as technicians in terms of things like how we use the cameras to get you in and out of cut-scenes, the seamless interrelation of cut-scenes and the game, things like that. We've made so much progression – we've got better tech and better technicians working on it.

One thing that really stands out is the quality of the cut-scenes, the acting, the interplay of the characters on screen – it feels a lot more naturalistic now...

It used to be like watching youth theatre! The most you could possibly get in the world at one time was three people. It felt so amateurish, but we used to have to push it into the game and hope we could make it just about okay. Now, it's not like they're shooting a big budget Hollywood movie, they are. It's just that there's more of it and they're chopping it into smaller pieces. It's incredible to watch it going on, I feel like a complete spare part. I watch our incredibly talented director, Rod Edge, who's been with us since GTA IV, and occasionally give him a note. But fundamentally, it's their territory, I stay in the background. It's phenomenal what they're doing there – we have a mo-cap set-up that only Weta and James Cameron can match.

And this is about full performance capture these days?

We gave up the phrase voice actor in 2008 and we haven't used it since. We don't have voice actors anymore, because they're the same as the mo-cap actors. This is something we discovered by chance. We used to use famous actors, partly because the mo-cap process was so cumbersome and we could only have three people anyway. But on San Andreas, a guy, a sort of second-rate comedian, got offended by the script and stormed out of the recording studio, shouting, "I'm not doing this, it's offensive." We just thought, well your agent did some great research there.

We were wondering who we'd get to do it and I was watching the videos of the mo-cap sessions and I was like, 'the guy who's doing it on set is really good, why don't we just use him?' And we did, and the proximity of the performance to the animation was much fresher than we were getting anywhere else. We did Bully straightaway afterwards and that was using kids - there weren't enough famous kids to do it anyway, so we used the same actors and it really brought it to life.

It's all based on a sound stage now. It's the same performance for voice and body. You do it all in one capture. Any one character might have a range of actors, you might have a stunt man doing some moves or a weapons specialist doing others, but for us, we're forgetting about the concept of an actor and just capturing the person who feels alive in this world. When we get it all feeling seamless, like we did with John Marston, we've done a good job.

How do you build your characters for GTA? Do you take inspiration from people you know?

I hope not! It's a sort of collaborative effort, there's not really a formula. Sometimes you see someone, someone on TV or walking down the street, or you meet someone and you think, 'There's an aspect of this person that's so ridiculous, I just want to capture that'. Or one of the other guys will go, 'I just met this maniac who walks like this!' – and the character will evolve from there. The first thing we speak about might actually get dropped, but it will be the atmosphere, some veneer of over-confidence or some rabid insecurity beneath it – that's what we'll wrap a character around. Or sometimes it will be one of us watching a terrifying documentary about a serial killer, and there will be one thing about him…

So they're not people you know?

The only one that I would confess to being fully autobiographical to me was this horrible character in Bully who was based on a kid I went to school with. The rest of them, they're all composites from me, from Sam and a bunch of other guys coming up with ideas. Then it's a question of getting the look right. But then once it's written, it's about the combination of animating, game design and acting.

Can you tell us a little about this collaborative process early in a GTA game?

So me, Rupert Humphries and Imran Sarwar, one of the main designers, will sit around early in the game, talking about stuff, then Sam, Aaron and Leslie will look at it and sign off on it or offer feedback on it. But it doesn't really matter what we put down on the page, we might imagine certain characters are going to be very strong, and they're not, and others start out okay and turn out fantastic. It's all combined with Mike Kane, who's the chief character designer, and his guys. It's also the actors and Rod and the mo-cap guys bringing these character to life – everyone has input.

The idea, the page, is one thing, but the end result is often miles away. I think that's a strength rather than a weakness. Sometimes, a character will come back from the first round of mo-cap and you'll go, 'Oh, that's so wrong', and we'll say, 'Get rid of it and do it again'. But usually, they'll come up with something that's different from what we were thinking of – and much better. If we've cast a good actor and they really attack it, they'll help find a direction for it. We have a fairly low attrition rate on that stuff. But getting it to life is definitely a group effort. At all stages. Cameras, different techniques for different characters… there are lots of little tricks to bring it to life and make characters memorable – even though you're only with them a very short amount of time sometimes.

Do you think about the meaning of the game in the early stages? Do you look to convey specific messages?

Because of the nature of games, this combination of narrative and freeform experience, they can give you an experience that is very different from what someone else discerns – it can mean different things, which I think is their greatest strength as an immersive medium. We're very hands off in that regard, the authorial presence should be hands off in terms of determining interpretation, otherwise it's not remotely sophisticated. But I'm not saying we are sophisticated!

You talk about collaboration a lot – it seems very important at Rockstar. Are you constantly having to rewrite narrative based on feedback from the game designers?

Well… we chop it up. We have an overview that gets turned into a game design and a game flow and the missions. We do bits of it, I'll do some on one mission, the others will do some – it's very easy to fix bits that way. We're not precious about it... well, we're precious at the end – is it any good?

But it's only occasionally that we'll have real problems We have a couple of game designers with us all the time while we write, so we're not working against game design. It used to be back in the day that there was a bit more of a structural break between game design and story writing and we've really worked hard to get rid of that so we all feel like we're equally invested in it. There shouldn't be this big space: the story needs this and the game designers need that. Hopefully, if we've planned it all together, we should all feel one and the same, we shouldn't feel like separate departments. When it comes to actually writing the exact dialogue for within the body of the mission, the writer and the designer sit together and go through it line by line by line. But even before that, it should feel collaborative all the way along. The conflicts are usually: 'This idea looked great on paper but for whatever reason it aint working,' so we all have to agree on replacing it.

Do you have creative flashpoints?

Not really, it doesn't really work like that. The flash points are these: this bit's needed for the story, but it's not working in terms of gameplay – the mission is not fun, it needs to go. We always have missions that get cut out for whatever reason. We either have to rejig bits of the story to make it all tie together or we have to cut that bit of story onto a different mission. This game is very tightly bound because it has three interconnected stories the whole way along, it's complex. But everyone approaches them in the spirit of, 'How do we fix it?' If we all understand what each bit needs, how do we make it all gel together?

It's a bit like editing a movie in that you need to get it to a certain length. The tech is better now, it makes it slower to work but you can fix things more easily, you can repurpose bits, throw things away, fix them up again. We've always lost bits – 'Oh it's not making any sense!' – then you just redo one scene and it makes perfect sense. That's just a standard part of the process.

We pride ourselves on not being too pig-headed internally. Our goal as a company isn't for people to say that Rockstar has got good game design but shit stories, or good stories and shit game design; we want them to say Rockstar make good games. Ideally, they can't think about anything except, 'I love the whole experience'. The goal is to have the whole thing feel indivisible.

Which is something that games criticism has to catch up with…

You know, game reviewing, when it sort of breaks down into checklists, you feel like you may as well have made a lawnmower. It feels odd to me. I mean, games are sort of like a machine in some ways, but I still think that's a strange way to think about them. Don't think about the graphics or the music or whatever, just think about the whole. Was the experience engaging? That's what we're going for. We tailor our stories and our mission designs to make this total experience that will feel good alongside the graphics, alongside the physics – it should all feel cohesive, it should feel that the whole world exists and you can't really separate the elements. It's all got to gel together – that's when we think we've been successful.

Part two on Monday covers the making of Los Santos, the emphasis on male characters and the chances of ever seeing another GTA title set in Britain...