I'm not a fan of sandbox game design. In my experience, most people who do this either create nothing and sort of hope the players will come up with something, or design gobs and gobs of stuff that quickly overwhelms the players. I vastly prefer "quest" directed gameplay, where I give you, you know, something to do, and you get to figure out what the world is like by having it run up and hit you in the face.
But after playing things like Oblivion and Grand Theft Auto, I kinda wonder if I can't do it another way. They create huge worlds, and then point you in a direction. Wherever you go, there are interesting possibilities, and even if you go flying off the rails, the world remains fascinating. Vampire seems ideally suited to this style of play, as does any urban fantasy game. You create the city and players just... play in it. I give a strong, starting "quest," and then let players sort of get involved from there. My typical story involves bringing players to an interesting spot, letting them do what they want, and then wrapping up and moving on when they've "played enough." This could work the same way, only on a much larger scale.
It's not like I lack material. Weapons of the Gods had more than 50 NPCs (at least 50 fully statted holy cow). In a horror game where characters can die (and even have the players killing them off), it makes sense to try to have even more. So I'm trying an interesting experiment: Families.
Damnation City suggests designing a city in terms of Districts and Sites. You create an over-reaching district (say, Chinatown) and then design sites within it (Say, a dojo, a brothel, an occult book store). This makes it easier to figure out how to come up with an entire city worth of sites, because they're broken down into districts.
So, why not do the same for NPCs? You come up with families of NPCs. Perhaps there's a group of NPCs from Chinatown, chinese who descend from some immigrants back in the 1860s when people were building the rails, and now are quite Americanized. Come up with 5 specific NPCs per family, design 10 or so families. Now, it's easier to design 50 NPCs and each NPC comes with prewritten attachements. Got a thing for the cute asian girl who keeps showing up at the night clubs? Did you know her younger sister is in school? Or her aunt is a hardcore detective? Or that a boy from the other chinatown family has opinions about the daughters of this family and who they should be with? Suddenly, there's a whole web of relationships for your character to explore and, should he choose, screw up.
I'll try it. We'll see how well it works.