Yeah, I know, you get threads about this all time. But being permanently and irrevocably locked to a single faction and corresponding zones on the basis of a choice made at character creation is THE sticking point for a ton of elder scrolls fans who might be interested in this game otherwise - they're out there, I know plenty personally, and I'm pretty sure they're in the majority even if this forum doesn't reflect that. Taking a hard line on race and faction restrictions will cost this game sales and hurt its longevity. It can't be reiterated enough.

And strict faction restrictions is something every other MMO designer is moving away from anyway. People play these games to play with their friends. In fact, in a lot of cases your friends are what keep you playing, and designers are beginning to realise that it's not in their interests to force people apart because they have irreconcilable aesthetic preferences. Since Funcom revealed The Secret World and announced that whatever faction you align yourself with in their secret war has absolutely no impact on who you can group up with to kill monsters I've been asking myself why it isn't a standard feature in every MMO with some vestige of PVP. Even WoW, the major reason that just about every new MMO even has pvp factions, just recently introduced a race that you could freely play on both Horde and Alliance. To my knowledge it hasn't destroyed pvp in WoW, so that at least puts paid to the argument that you need to be able to distinguish your enemies race by their silhouette from a mile away to have quality pvp. Though I'd hope that wouldn't be a feature in TES Online anyway - the sort of exaggerated proportions you'd need to be able to reliably tell a Redguard from a Nord from a distance when they're both in full plate armour are at odds with the franchise's traditional "realistic" style.

But I mention EQ2 specifically in the thread title because its "betrayal" system proves that you don't have to choose between, on the one hand, warring factions with distinct looks and racial identities, and on the other, giving players the freedom to play what race they want and group up with whatever other players they want. You really don't. Just let people switch, but don't make it easy. Make some kind of defection quest. Make it hard, if you like, make it a huge grind even, that's certainly the everquest way, but just implement SOME way to let people play a Dark Elf in Daggerfall if they really want to. It won't break the lore. It'll just make the world feel more real. Player characters are, after all, basically hugely powerful mercenaries whose assistance you'd be crazy to turn away because of mere bigotry. Push back release if you need to, it'll pay off, it'll bring in a ton more players who only give a damn about this game because of the license name and want the kind of freedoms they expect from an elder scrolls game. Just do it.

TL;DR: I want a betrayal system.

You will be able to have characters in all factions, so with three characters (one in each faction) you can see the entire game and play with friends in other factions. You just won't be able to be on the same Cyrodiil campaign with those characters. For information on how campaigns work see this link: http://tamrielfoundry.com/2012/10/interview-brian-wheeler/

With the above in mind, your whole post is a strawmen and pointless. I hope to have helped.

in all honest, I don't know...I feel like its good that races are locked to a faction but at the same time I think its sad that players won't be able to explore the enemy territory.
but if thats the way it is, I'm fine with it. what matters to me is the combat, the way the gear/character progression works and the social features like guilds and parties.
you'd be surprised by how little influence the other things have.

its starting to sound like people are just spoiled, I want this I want that I want it there and I want it now.
I want a virtual reality MMO, which won't happen, maybe its easier to explain WHY it won't happen, but that won't change the fact that its not going to happen. I'm sure the devs have their reason and if they change their minds, they'll change the game.

Once game gets underway we will learn to work with what they give us.

I know? That was never in question? I don't think you know what a strawman is?

Some people hate making alts, they won't even consider it. I'm not one of them, but I can sympathise. And some people straight up won't play if they can't be an argonian or whatever and still play with their guild, which went for a different faction. Probably a bunch of established guilds will have divisions on every faction, but they'll be the minority.

Well it's usually a good policy, when you're making games, to try to work out what people want and give them that. I mean yeah, sometimes it's perfectly valid to say "You don't know what you want! Try this, you'll like it" but in this case it just feels like such a huge misstep. A game that has the PR problems ESO does doesn't need to be distancing itself from the elements that long-term fans cite as what appeals to them about the series - openness, freedom, that sort of thing.