The first two Elder Scrolls games came out in the 90s, and were ahead of where both technology and game design were at at the time. They were an attempt to bring to life the open-world-fantasy-RPG wishlist that western CRPG fans had been building in their heads since the 80s, and they succeeded in a lot of ways, but the combination of the necessary complexity with the state of technology also made them clumsy and inaccessible to all but the most dedicated of nerds.
The third game, Morrowind, came out in the early 2000s, when both affordable technology and game design praxis were both in a much better place for Bethesda to develop the type of world and experience they were envisioning. The result was a great balance between good looks, smooth play and accessibility v.s. complexity and depth.
So all Bethesda really needed to do for the fourth game was tweak the formula. Sadly, what they ended up doing was upsetting the balance they struck with Morrowind; continuing to push farther than necessary from "accessible and smooth" and winding up at "dumbed-down and oversimplified."
Oblivion takes place in Cyrodil, homeland of the Imperials first seen in the original game Arena, and apparently a place where the minimum age to be a resident is 50. Aside from inflicting the world in general with a dire case of the Oldballs, Oblivion looks fantastic; character models are much more detailed, lifelike and well-animated than in Morrowind and the terrain is gorgeous. The monsters look particularly great, charging at you like wild assholes with a nice range of well-animated motions.
The game has been drastically restrained and simplified in a number of ways, however. The lone benefit of this is a nice "quick travel" option, where you can use the map to instantly travel to any city or location you've personally visited so long as no enemies are currently on your heels. Well, that, and the horses found in Daggerfall are back ... but the trade-off there is that the Levitation spell is gone.
The horse-for-levitation trade actually illustrates the main problem with the game's design; in focusing so much on removing potential "game-breaking" overpowering elements, Bethesda removed a lot of what made Morrowind enjoyable. The biggest (and most controversial) change in this area was instituting loot and monsters that are "scaled" to your level in every area of the game. Morrowind would merrily allow you to wander in the wrong direction from town at any given time, stumble into a cave or ruin that was way too much for your present level without any warning, then watch you get stomped by the denizens without pity. However, Morrowind's counterbalance to that was perfectly effective; if you followed the story cues and went to Balmora at the outset of the game, did the early Blades quests, and did the other quests that you could get in that area, all of that stuff was designed to gradually power you up from newbie status, so by the time Caius ordered you off to farther cities to get your new missions, you were ready for what you would run into out there. Morrowind also required you to pay attention and read a lot of text, however; your more "casual" contingent
probably couldn't be stuffed to read, kept striking out in random directions going to random places, and continually getting buttstomped, then whinged hard about it, prompting this design response.
One of the great pleasures of Morrowind, however, was something analogous to Metroid's "sequence breaking"; when you'd stumble across an area or enemies you weren't "supposed" to be able to handle yet, but through some ingenious combination of item and spell use and massaging the game's engine and AI, you would find a way to abscond with the phat lewts being guarded anyway. With across-the-board scaling, that pleasure is entirely gone now. And it's replaced with grinding; since you and the enemies are constantly on an even footing in base stats, and chests will never have weapons or armor much better than the shit you already have, the only way to get through long dungeons full of them is to one-up them by grinding your skills (through sheer repetition), and grinding out whatever bullshit boring low-level quests are available for cash to load up on potions.
"But ah!" you may say. "I play my WRPGS as a freebooting roguey thiefy vagabond sort! I'll shortcut the money grindery by breaking into houses and generally taking everything not nailed down!" Hahaha ... no you won't. My friend, I play as the same sort of piratey vagabond, and the TES world has cracked down hard on us here. First of all, any item marked as "stolen" apparently has that bank robbery dye on it or something, because no merchant will accept it for sale. The only means of selling stolen goods is to join the Thieves' Guild, which isn't out in the open like it was in Morrowind; it's hidden from you at first and requires a bit of obscure questing and investigating to find. Once you're in, you can only sell to a fence in the Imperial City who gives you a fairly shit price, and also prompts a fairly long and obnoxious detour if you are out toward the edges of the world looting and your inventory fills up. There's also no more casually swiping items on an unoccupied floor of a house; people have some kind of psychic radar and will come running, giving you an instant bounty, and telepathically alerting every single guard in the game to your identity and crime. While we're on thief-related subjects, the lockpicking mini-game is also kind of obnoxious at best, and glitched at worst. I wasn't able to cancel out of it once it began, forcing me to restore a saved game if I accidentally tried to pick something I didn't mean to or ran into a ridiculously hard lock while low on picks (picks are also in very short supply until you join the Thieves' Guild, then you still have to return to the Imperial capitol to buy new ones.)
Where the game really fell apart for me was the 60 "Oblivion Gates" you are tasked with shutting as the game's main quest. Thanks partially to the insistence on scaling, and partially just bland repetitive design, nearly every single one of these things is an identical (and boring) experience.
Oblivion is far from bad. It's very pretty, the combat system is better than that of Morrowind, and if you're just looking for a fairly generic fantasy world to get lost in hacking up goblins and doing lots of fetch quests for people, it'll certainly fit the bill. With all the other gaming options out there, though, to me it didn't have the extra "oomph" to make it worth my time; boring story and characters, over-serious, repetitive dungeons, and just generally being too much of a samey-but-weaker experience as held up next to Morrowind.