RPGamer was invited by Bethesda to a screening of its upcoming PC and XBox 360 title, Elder Scrolls IV: Oblivion, and it was a great way to end the first day of the show. From start to finish, the demonstration we received was an eye-popping, jaw-dropping experience, with no hyperbole.

Oblivion has been developed from the very beginning with a next-gen outlook in mind, and as with each previous Elder Scrolls title, Bethesda started from scratch, looking to address what gamers want to see in a game. To that end, they put together a truly stunning package, from the graphics to the AI to the gameplay.

The first thing that is immediately apparent about Oblivion is how very good it looks. Players start out in a dungeon, and the multiple textures and diffusion pixellation combines gorgeously. The bricks in the dungeon actually looked like cold, glistening stone, and when the character turned, the shadows shifted and the soft dynamic shading strutted its stuff.

Once the character drew his sword, it became apparent how much work went into every aspect of Oblivion. Including the sword, which was intricately embossed with a runic-looking design and realistic texturing, there are thousands of hand-designed items, each painstakingly crafted by the design team.

It's not all just pretty colours and incredibly detailed sound, however. While the game will include over fifty hours of recorded voices, consuming half the space required to install the game, the gameplay has received equally extensive attention. During the initial jailbreak sequence, which will comprise a significant portion of the game's overall playtime, players will be able to mold their characters as they see fit.

Oblivion utilizes a system somewhat akin to Final Fantasy II, whereby each use of a skill or ability improves its efficacy. Thus, if you hammer on stuff with an axe repeatedly, you will gradually become a warrior, whereas if you choose to hang back and toss fireballs at enemies, you will gravitate towards the mage class. Things are not quite so black-and-white as that, however; Bethesda has indicated that it is also possible to have a mixed class character.

In terms of the actual mechanics of the gameplay, there are a myriad of ways in which gamers can dispose of monsters. Beyond the usual hack-and-slash options, which are in themselves very detailed (swords target specific areas and depending upon which area is targetted can result in futile shield battering or an instant beheading) players are also able to use their surroundings to their advantage, while viewing them from either first-person or third-person perspective.

Plenty of traps litter dungeons to be sprungon unsuspecting monsters (or gamers, if they are unwary) and weapons interact with these surfaces in highly believeable ways. Additionally, there is a stealth mode in which players can use a bow and arrow to effect, springing traps and firing arrows at a variety of surfaces, each reacting realistically to the bowshot.

Traps and surfaces riddled with arrows aren't the only things that react realistically; Bethesda has created a physics system with astounding complexity, and objects swing, crash, roll, and even grow in believable ways. In fact, the outdoor areas aren't even designed; Bethesda's development crew went to the University of Maryland to study such topics as soil erosion, plant growth, and ecosystem interaction, with the ultimate goal of a forest that generates itself based upon complex rules based upon nature. The results are nothing short of spectacular; besides the lush graphical settings, the diversity of the wildlife is amazing, and players can find a variety of plants and animals that can be harvested to produce items in the game's item creation system.

All of this is seamlessly and attractively displayed, with a minimum of onscreen clutter. Bethesda says that it wanted players to concentrate on gameplay, not constantly tweaking menus, and to that end, there are no numbers displayed onscreen. They are available in a backscreen menu, but as they update automatically (there is no experience as such) they are out of sight, out of mind. To add to the ease of gameplay, a compass onscreen directs players to areas of interest.

Not so out of mind are the game's thousand NPCs, each of which follows his or her own unique daily schedule. Even some animals are governed by the system; Bethesda explained that much like the forest, the level of complexity they sought to incorporate in their game required some complex routines that involved a range of possible outcomes based upon a few general criteria. Characters are therefore driven by goals; in the example we were shown, the demonstrator entered a bookshop and showed us how by saying different things to the NPC, we could glean more information from her and change her opinion of him.

All of this information is stored by the game, and it keeps track of each of the thousand NPC's opinions and actions in what Bethesda deemed Radiant AI. Thus, these changes can lead to variations in their routines and cause them to take sometimes bizarre action (the bookshop lady, for instance, after growing irritated with her dog for interrupting her attempts to chat up the demonstrator's character, first cast paralyze on the creature and then, when it started yapping again, scorched it with a fireball, much to everyone's surprise). Bethesda also mentioned that crime was currently a problem with the AI routines, and so currently, it has rather harsh implications to avoid causing every NPC to take up a life of crime.

Players can obtain goals of their own by speaking to NPCs, and as an added bonus, if these goals require travel to places a player has been to, there is no need for the monotony of a journey on foot through a gameworld whose capital state alone spans 16 virtual miles. Instead, a map system similar to that found in FFIX is utilized, allowing connect-the-dots travel instantly and greatly alleviating one of the major complaints with the previous Elder Scrolls title, Morrowind.

Beyond the NPCs, there are also over 400 books scattered throughout the game world, each readable both by players and NPCs (they are also at the mercy of the physics engine; when the shopkeeper toasted her dog, she also singed the cover of the book she had been reading.) These books can also influence the actions of NPCs, who are governed by the same character system as players.

Not merely content with pulling out all the stops, Bethesda has also gone above and beyond in assembling a world-class team of voice acting talent. Much of the cast will be revealed in July, but while watching the demo, we were able to discern that Patrick Stewart will be doing voice work in the game; in the segment we viewed, he gave voice to the Emperor of Tamriel, the fantastical country in which the game takes place.

There has been no other game quite so impressive as Oblivion thus far at E3, and it would be difficult to imagine one appearing. It should be mentioned that the minimum system requirements for the PC version will likely be very robust; even though the demo computer was likely a top-of-the-line model, some of the larger areas still chugged in places. Nevertheless, this was a minor chink in Bethesda's armour, and the demonstration was by far the best show of the day.