Simple enough.
How do you craft your characters for foundry stories, for example I start by figuring out what the character's role and basic personality are and go from there only putting in the finer details while doing the final polish on the story.
A more detailed example that involves spoilers for my "Price of peace" mission
When crafting admiral Rauha for the mission, I knew that main antagonist would be a renegade starfleet officer and that he/she would be tragic villain as from the begining my idea was that the "wounds" from the UFP/klingon war had pushed this officer over the edge and said officer was unable to let go of their hatred for klingons, but at this point I hadn't locked down said officer's species, race or gender. Those didn't come until later when I was crafting the custom costume for that character and were chosen on the basis of what looked good for the character, as for the name "Rauha" it's actually means "peace" in finnish, so I thought it would be funny/intresting to have a character who is obessed at avoiding peace with the klingons to be named that
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For story arcs, these are the core characters that I want to have go through something over the course of a mission or series. I'll think about what would have an interesting impact and work from there, changing elements as necessary to have the best impact. An example in Trident [AEI]: Oxi Eskarosa. She started out simply as "female adventuring protagonist." She finalized as deeply religious and yet stigmatized by that religion for an incident which left her with prosthetic arms. The episode pitted her against the god-figure of her religion, who took more from her than before but ultimately failed to overcome Oxi's spirit and perseverance.
If I create a character by setting, I think about the environment my characters are in. Who might be there? How has the environment shaped them? I just let myself extrapolate a character. An example of this (also from Trident): Ereeg. Ereeg was the member of a Feral species (of questionable sentience). Through interacting with other species, Ereeg learned her potentials. She made the choice to try to live in communities and travel the world with her fellow sentient beings. That comes from thinking about local species dynamics, community structure, and how an individual might respond to that from a given starting point.
Neither of these precludes a story arc character from being shaped by their environment, or from a setting character having a dynamic arc. These are just generalizations on where I get started.
Notable missions: Apex [AEI], Gemini [SSF], Trident [AEI], Evolution's Smile [SSF], Transcendence
Looking for something new to play? I've started building Foundry missions again in visual novel form!
I just make up a characters who I think would be interesting and then either have their actions determine the story or the story determine their actions. Really depends on what works out better. This has worked out surprisingly well for me so far.