I want to make it so that when a character goes into an area a text will come up and say the name of the area they're in. I'm thinking of putting an object on the screen (like a hud) and then changing it when the player enters an area. Is this the ideal way to do it, or is there a better way?
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When you are ready to display it, perform object.maptext = "text here" on it.
If you want some cool animations on it then look up animate, transform, and matrix. Play with it for your desired results.
To keep your screen objects list clean, set it's maptext back to = "" (or null, not sure if this will cause problems), remove it from the screen after you're done using it, and add it back next time you want to use it. You can store this object as a variable on the user for future usage.