I think it sems as if too many people just say things like "too much resources are required", "too difficult", "too much coding", "too much time", "just doesn't work", etc...
I'm not saying that I know it myself. But seriously, people: I can almost assure that you have no true idea of such things, unless you've made an advanced game yourself with these features.
If you have no idea of what you're saying; then at least say that too, or don't say anything like that at all.
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I think this would be great. A lot of games have flammable environments. I think it would be extra cool, considering that we have dragons that breathe fire
It would indeed be pretty weird (and immersive & atmospheric-breaking) if a powerful dragon comes and breathes fire, but nothing catches fire.
Flammable environments existed partly in Oblivion (for characters), so I believe it's really not very hard to do... A mod even applied it to objects, so that they would burn by a fire spell for instance.
Also people need to understand that flammable environments doesn't mean that the object is destroyed or anything. It means that it just catches fire. I'm pretty sure it would be returned to normal once the fire effect is decreasing over time
Example (Crysis mod): http://www.youtube.com/watch?v=FpyCWXbnsDE
Example (Far Cry 2): http://www.youtube.com/watch?v=3PwJbxixz4E
Freezable environments would be awesome too from frost spells (but not as obligatory as flammable). Crysis had this fully; a complete "snow/freeze" shader applied to all objects. I'm sure something similar could be done in Skyrim.
Example (Crysis frost shader): http://www.youtube.com/watch?v=eJamPg9ZBW4