Elder Scrolls IV: Oblivion Interview
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Q: In the early days of nailing down the Oblivion design, what were the key features that you held off implementing in Morrowind that you were determined to implement in Oblivion?
A: There are innumerable elements that we wanted to improve from Morrowind. The AI was a primary focus, so we developed the Radiant AI system to allow us to breathe life into a world with well over 1500 characters. Physics are another feature that we made a priority from the start and they are incorporated into every facet of the game from magic to combat to traps. Other things we've done as direct improvements to Morrowind include jacking up the view distance to extreme levels, providing mounts for the player to ride, and changing up combat to be less of an abstraction and more of a visceral, kinetic experience.