The Elder Scrolls III: Morrowind Retrospective
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They identify it as the first "modern" Elder Scrolls title, due to the reduction in scope and the introduction of modding, and cite its "bizarre" setting as one of the reasons for it being a fan favorite to this day. Here's a snip:
Like other games in the Elder Scrolls series, players were left to their own devices when it came to exploring and playing. Given a few leads on the main quest and dropped into a coastal town, they could then set off in any direction and explore any open dungeon or town, or take part in any sidequest and guild they chose. For some players it was the first game that featured such a level of freedom, and as a result many often ignored the main story for the many riches to be found off the beaten path.
There are obviously a number of differences between more modern Elder Scrolls instalments. The lack of a compass for quests meant you had to manually follow directions and road signs to reach your destinations. Enemies were of a fixed level based on their location and didn't scale to your own, making random exploration a more dangerous affair, and magic wouldn't regenerate, requiring a steady supply of potions on your person. It was also possible to kill key characters, which allowed you to break questlines permanently, but was a factor that contributed to the game's enduring amount of freedom.
