Bethesda Software has made four Elder Scrolls games since the first, Arena, in 1994, and quickly established a following. Ken Rolsten, lead designer for the series' upcoming chapter, shed a little light on the managing the nonlinearity/storyline tradeoff. Elder Scrolls III: Morrowind avoids the problem by providing a core plot, but one that doesn't blanket every aspect of the game world. Rolsten said, "The best way to do it is to give every group a story and desires, and find where [game quests] may fit into the larger picture. If they're good for the gameplay, they may not even have to fit into the overall story, and can exist just for people to role-play and do quests."
The original Elder Scrolls: Arena revolved around the eight provinces of Tamriel. Daggerfall reduced the scope of the map, to only two provinces, allowing better plot development; and Morrowind will scale the map back still further, presumably allowing fine control over the plot webs covering the game world.
Elder Scrolls III: Morrowind also plans to use an expanded game engine, better able to use current technologies than those used in Arena and Daggerfall. According to Rolsten, "It's changed completely. All new. It's still full 3D, but supports all the latest hardware features. It's Direct3D only, uses T&L, 32-bit textures, skeletal animation...the works." Still thirsty for more? Check out RPGamer's coverage.