So they didn't opt for a more bizarre atmosphere. There's nothing wrong with doing a medieval European world; just because others do it doesn't make it any worse of a setting. And they did it better than anyone else did.
It is when the ruins of Medieval Europe are more interesting then the abstract concept that fantasy extracted from it, something is very wrong. It means it is no longer a fantasy world but a poorly executed cliche.
No it doesn't. It's an example of skewed perspective as a result of being used so many times. But how good it really is would be independent of how often it's actually used.
Badly in this case because there isn't any real distinction or depth in the world.
Morrowind was bizarre. And it appears almost everyone here didn't want a TES IV, they wanted a Morrowind II.
You didn't actually answer the qeustion. Why is the choice between fake medieval Europe and the bizarre?
It might have been good for its time, but it didn't have cutting-edge graphics, a Havoc Engine, or the immersion of a TES game. Even if some say it had far less immersion than its predecessor.
Which part of the cutting edge graphics and havoc engine are part of Lore or immersion? Pretty graphics and a poorly implemented physics system don't actually make the world any more interesting.
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Never the less, this seems to be no longer about chapels but you trying to defend Oblivion lack of depth by saying it's a good game. Been there, done that, get over it.