I read somewhere that breakable objects are implemented but to what extent? And how about the actual environment is that "breakable"?
Obviously an environment that the player will be able to heavily manipulate will be hard to integrate for several reasons. Below I state a few concerns/ideas.
One, how should it be determined how much impact a certain spell has (lvl of skill?).
Two, how does the world react in the long run (water freeze again, ice on tree melts, knocked over trees is replaced by new ones) - when does this occurs (once we leave the area or as an actual observable visual effect. The visual effect will of course add to the immersion, but it will probably be really expensive to do with other areas being more important).
Three, what effects will it have on balance. Being able to manipulate the environment in such ways could mean that a mage would have a massive advantage over the classic warrior. One way around this is making shouts the center of these physical manipulations. Afterall I read somewhere that some Dovahkiin was able to knock down walls using the innver voice. So cracking ice or knock over trees shouldn't be much of a problem. I know it is a single player game but knowing that another playstyle is significantly more effective might lead to some adapting a playstyle they do not not identify with.
Four, how will the AI handle it? This is really important! If the AI cannot handle such things I would rather have the developers leave such ideas/features out. The fewer exploits the better.
Five, can it be implemented in other parts of the game. Traps spring to my mind.
Six, how is situations where the player in some way manage to block his own path avoided?
Seven, (this is very theoretical) say I manage to provoke a rock fall which hits a city. If this actually damages the city there are a number of questions. Will it be a criminal act? Can the inhabitants repair the damages (in some extent they must be able to do so with rampaging dragons)? What if key-persons gets killed in the process (I know about the radiant AI, but my guess is that not all persons will be able to be succeeded by a relative for obvious reasons). Etc.
Eight, how much will it toll hardware?
Such a physics system will of course be very very difficult to implement but some of it should not be impossible. This could really add to the immersion of the game as the player actually will be able to manipulate the world in a realistic way and it opens for a lot tactical considerations. A lot of people, including myself, would also find it infinitely fun to play around with it. That being said I would prioritize good side quests an awesome main quest and better AI etc. before such a advanced physics system.