I think that when talking about fantasy worlds, it's often a good idea to use the term "believability" rather than "realism", as this avoids the misunderstanding that leads people to say things like "This is a world with magic and cat people, it's not supposed to be realistic." and such. I think the problem here is that when you just say you want more "realism" without going into more detail, people might think that you want it to be like real life. In other words, it gives the impression that you want the fantastical elements removed from the world, which is probably not an accurate assumption, as when people criticize a work for a lack of realism and actually mean it in that sense, it's probably usually because an unrealistic element was added into the work that people felt was out of place, say... supernatural elements suddenly showing up in a series that had previously adhered to reality. After all, people who aren't interested in fantasy to begin with wouldn't be watching/reading/playing it in the first place. Still, to avoid misunderstandings, it's probably best to avoid using such a term that people can be sensitive to in a fantasy or science-fiction based community. So now that we have that aside, suspension of disbelief is often an important thing in fiction, because enjoying a work of fiction often requires accepting unrealistic things, this isn't just true for science-fiction and fantasy, but I'd say it's most important in those genres as by their very nature, they are somewhat distanced from reality, how far, of course, depends upon the nature of the setting. And in such settings, I think what they need most is not necessarily realism, but logic and consistency. Neither of which necessarily mean realism, after all, in the Elder Scrolls, people can use magic to do things like heal themselves or others, unlock doors, or kill people. That's not realistic, people can't do that in real life, but it still makes sense, as magic is an established aspect of the setting, and it makes sense that if people can use magic, they can use it to do certain things, this ultimately goes back to suspension of disbelief, as if you tell me that your setting has magic, I can accept that, and that it can do certain things. Consistency comes in when a story obeys its own rules and doesn't go changing things without reason. In Star Trek for example, I can buy that since the Enterprise has warp engines, it can travel to other star systems in a reasonable amount of time, I can also buy that the crew can quickly beam down onto planets or back up to the ship using transporters. This is because it's an established aspect of the setting that this kind of technology exists in it, now I'd start to find things less plausible if I saw an episode where established limitations on the technology in the setting were ignored. Fiction doesn't always need to follow the rules of real life, but it should at least follow the rules it establishes for itself. Indeed, sometimes, bringing realism into a setting can come at the expense of consistency, if the writers decided to remove or change some unrealistic aspect with the intention of making the setting more "realistic", which ironically often makes it less believable. I also expect my fiction to follow logical story progression and for characters to have reasons for doing the things they do. Now these reasons don't always need to be stated outright, if a character goes to eat, I'll generally assume it's because the character is hungry, even if I'm not told that. But if it's not obvious why characters are doing something, I usually expect an explanation, unless it's the entire point that their motives are mysterious, at leaat for the time being. Being able to suspend your disbelief in fiction is always important, it's just that adhering to the rules and laws of real life is not always the way to accomplish this. And just how realistic a story should be depends on its nature, genre, and the nature of its setting.
Now when talking about realism or believability in games, one must consider the question from areas not present when discussing the subject in non-interactive mediums, as games also include gameplay, and tycally gameplay needs to be entertaining for the game to be worth playing, and thus they sometimes must make departures from real life not just for the sake of creating the desired setting and story, but also for the sake of fun gameplay. And whereas bringing certain aspects of realism into a story might help to improve it not just by making it more believable, but by also giving the characters concerns that audiences can easily relate to or by adding a greater sense of drama, but if they were made into gameplay mechanics, they just be boring or become annoying. Let's take needing to eat, for example. This often comes up even in fantasy and science-fiction novels, which is believable, as one usually assumes that people, even if they're living in space, on another planet, or in a world of magic and unicorns, and indeed, even if they are not actually human, will still need food to survive. It also has its narrative uses, as the need to eat can lead to a number of situations, for example, it could be a source of drama if the characters need food and there is none readily available, therefore they need to find some, or one could use the fact that the characters don't even have enough to eat to emphasize how desperate their situation is. Or one could use it as a way to introduce other plot events, such as having the characters go into town to find food and encounter some situation of interest while doing so. The time characters spend eating could also be used for character interactions. In the end, while a work of fiction may contain many unrealistic elements, that does not mean it cannot also have a bit of realism in it too. Now in video games, on the other hand, one must take into account gameplay as well, and what makes for a good story does not always make for good gameplay, I'll go to the eating example again. Now, obviously there are some who seem to like the idea of needing to eat in games, but myself, I don't want it. I don't find needing to find food in games fun, it's just an extra annoyance that doesn't actually add much to gameplay to me. Besides, if the game is like the Elder Scrolls where food items exist and can be eaten, if I want that sort of thing, I can still choose to eat, which I've actually been doing as part of my role--playing with my latest Morrowind character, this way, I still get the extra role-playing depth added by eating, but since it's something I chose to do myself and wasn't forced on me by the game, it doesn't feel like a chore. I also don't have to worry about my stats suffering if I miss a meal. It could also be argued that a realistic setting doesn't always mean realistic gameplay, and the reverse of this is also true. I've seen games take place in a reletively realistic setting, at least to the point where it has no supernatural or science-fiction elements, but still be quite unrealistic in terms of gameplay mechanics, I could also argue that some science-fiction or fantasy based games still have fairly realistic gameplay. While they might involve magic or futuristic technology, in the real life aspects they contain, things are still handled pretty realistically.
In the end, I only object to realism in any medium, video game or otherwise, if I feel it is detrimental to the enjoyability of the work in question. And if I object to an attempt to bring realism into the game, it's not because it's realistic, in and of itself, but because I feel that it would make the game less enjoyable to play, that's all.
There was a puzzle to unlock the treasure, and I did it wrong, so I ended up sealing myself underground for all eternity.
There's realism and challenge. Because it's the only security system I've ever encountered in an Elder Scrolls game that actually caught me and now I know better than to just pull on chains all willy nilly.
I'd say that the idea of having a security system that requires solving a puzzle is unrealistic to begin with, especially if failing to solve it triggers a trap that's either lethal or seals you in an unbreachable prison. After all, what happens if the owner gets it wrong? Keys exist for a reason, you know.
And I'd say that putting the player in an unwinnable situation isn't so much challenge as the game being a jerk, if it's going to do that, it should just go ahead and kill you outright, or pull a non-standard game over, not try to pretend that there's still hope of getting out, potentially leading to players saving in an inescapable situation.
And there are lots of games, that do lots of different things in a lot of different ways.
Why make TES like every other game? Why isn't it allowed to be different? Revolutionary?
It is allowed to be both different and revolutionary, it's just that a game that isn't fun is still not fun, even if it is different or "revolutionary", so sacrificing entertainment value for the sake of gameplay is still a bad idea.
Besides, there are other games that try to be realistic, and some of these, I'd argue, by their nature, are more suited to that than the Elder Scrolls is.