@Neeshka: Well, my goal wasn't to debate immersion, since that's entirely subjective; I was only discussing the technicalities of MMOs versus Skyrim. I'll engage you on this matter if you want, though; keep in mind it's 5:30 in the morning and I've been up all day/night, so this might not be my most coherent rant.
Personally I have no issues with the Radiant AI and I don't feel like it's an obstacle to my immersion in the game world. To be honest, I'd find it a lot less immersive if all the NPCs were just standing around not doing anything rather than going about their lives. If that comes at a price, then it's not one that's so high that it's affected my enjoyment of the game. I don't personally find the gameplay to be "shoddy", and I haven't personally come across any immersion-breaking bugs -- not a single backwards flying dragon in my game so far.
I'm not in the business of assuming what the vast majority will or will not do in a game, so I won't really say one way or the other, except for this: I know several people who play this game who aren't big RPG players in general; average gamers in every sense of the word. When they talk to me about their experiences in Skyrim, they don't tell stories about the gameplay mechanics or how they're min/maxing their builds -- they tell stories about the crazy things that happen to them while exploring or, you guessed it, dicking around in a town -- things that happen because of the Radiant AI.
Are the benefits of Radiant AI always readily apparent? No. But if it wasn't there, I think you'd notice -- the experience would be a whole lot different, and personally I don't think it'd be for the better. If that is a wasted feature to you, then that's fine -- you don't have to like what Bethesda has going in their games, after all, and disliking it is a perfectly valid opinion to have. But what I don't understand is why it's such a mystery that Bethesda make their games the way they do, and why some people enjoy it. Their games don't bring in near-universal praise for being half-assed and mediocre.
Comparing the game to GTA and Assassin's Creed doesn't make sense to me. They're all "open world" in their own ways, but the focus of each game is wildly different. GTA and AC may have believable representations of large, bustling cities, but you don't interact with the people populating those bustling cities. Those crowds exist for no other reason than to establish the setting; they're window dressing. In Skyrim, every NPC you run across has a 50% chance of being part of a quest, and almost all of them have dialog. If you could walk up to a random pedestrian on the street in GTA and speak to them like you can in Skyrim then you might have a point, but you can't, because that's not what they're there for. Two completely different uses of NPCs, serving two different purposes.
At the end of the day, the amount of bugs that crop up in a game like Skyrim is almost certainly due to the enormous amount of content, content that would take a ridiculous amount of manhours to make completely bug-free at release. Those manhours aren't free, though, and either you pony up a whole hell of a lot of cash for a veritable army of testers, or you take two years past an already long development cycle to do the same amount of work with a smaller team. They need to release this product, and they're not going to spend more than they think is reasonable on testing, so they're going to do the best they can with what they've got in the time they've got. Whether or not someone considers this "excusable" is a matter of personal judgement. Personally, I find a handful of bugs to be excusable considering the scope of the project, and I would much rather Skyrim stay huge, complex, and Radiant-AI-ridden than the alternative.
Now you'll have to excuse me, because I'm about to fall asleep on my keyboard, and I can't be arsed to proofread at this point. Hopefully it's all legible.
(Edit: I lied. I spotted a couple egregious typos and my obsessive-compulsiveness compelled me to fix them. I'm closing this damn window before I have a chance to spot another.)
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