The Drag[en]gine is a fully customizable game engine and game development environment designed with modularity and extensibility in mind not requiring expensive licenses.
Video of the conversation editor. Just scratching on the surface of what is possible. The majority of game mechanics base on this system which is due to the dynamic and generic nature. It's also part of the basic engine distribution so you can use it right away in your projects.
YouTube version with higher quality under Youtu.be .