There is always an end to the amount of ITEM MODELS you have in a game, not their stats. What I am referring to, the scaling system, means you do not need to introduce more skins or models but have their values scale. It is actually pretty easy. Say you have a Dwarven Longsword. Now, you find a Dwarven Longsword (+1). You can keep going on and on Dwarven Longsword (+1000). That is a scaling system. What this means is that not only do your skills scale and dictate damage, but items do as well. Currently, items are static and skills scale...until you hit 100 - then they stop.
When I was referring to the pace you gain skills and levels, I meant POST 100. Currently, it stops at 100. This would open the cap up so you could increase it further. Past 100 however, it takes much longer to level skills and character level up. The reason for this is because Bethesda for whatever reason decided to introduce Fortify Skill Enchants that directly affect your skills based on a percentage, which makes items exponentially stronger. Personally, I think this was a really stupid choice but that is neither here nor there.
The Perk Mastery system is not fleshed out at all. It depends on what you do or how you structure it, but alternate advancement is always a good thing. The reason for this is that unless you want to more or less completely change your playstyle with the character you have built, you run out of Perks, or at least useful Perks. I would even be ok with a General Perks tree that are Non-Combat related and affect stats and non-combat things that you can continue to put points in nearly indefinitely.
you have a Dwarven Longsword.
Now, you find a Dwarven Longsword (+1) it makes the balancing difficult, or difficult to notice a diffrence,
Dwarven Longsword has lets say has 18 Attk, a
Dwarven Longsword (+1) would have 18.1 Attk?... not 19? otherwise a Dwarven Longsword +1 would be like an Ork Longwsowrd with 19 Attk (not sure if the Ork come after the Dwarf)
if you stretch the diffrence between Dwarf and Ork by ten, Dwarfen sword does 18 and the Ork does 28 damage, then Dwarven sword +1 does 19, +2 does 20 ect.., then it's just the same thing, the proportions haven't changed, it would feel the same
sticking to 18.1, 18.2, 18.3.it would be limited with 9 subtypes .. (unless it goes 18.01, 18.02, 18.03...but thats just too small/weak, even 18.1, 18.2 is kind of weak ,there's not much of an diffrence)..,
but (+1) with 0.1 steps would give the world more items to find.. ,but it would feel like in dragon age, many, many, many items; it makes the balancing difficult, but gives some more depth
and it would only stretch the Daedric with 9 more versions, it would end again anyways; unless the Daedric, as the final model is "limitless" and goes 1000000+ (only the last should limitless, otherwise a Dwarfen Sword +15 would be stronger then an Elf Sword, it would make things complicated, unless the Elf Sword is much, much more powerful??)
maybe everything should just me be more stretched, but l like the way it isn't overstretched in Skyrim (not like Dragon Age, not so well balanced and not such a diffrence.. but I love DA too, in a diffrent way)
if it had 9 subtypes (1+....+9) at least the Daedric +5 and onwards should be very hard to find and Daedric +9 only obtained when finishing some special/hard quest/fight (but if you already have the Daedric +8, there wont be much a diffrence, unless the Daedric only has +2, +5 and +9 = limited to three subtypes)
it's hard to judge, there would be balancing problems or you don't really notict it => armor: Dwarf boots 20 (+1),Dwarf arms 20 (+6),Dwarf head 20 (+2),Dwarf body 20 (+5), would make 1.4 more defence (0.1+0.6+0.2+0.5= 1.4), so instead of a total of 40 defence it would be 41.4, not much of diffrence (or the whole system would have to be changed)
maybe there would be more of a diffrence with the weapons, like a Dwarven Sword +3 and +7 (then there would be only 2 sub types, but still better then none....., or just one "+", meaning +0.5, Dwarven Sword has 18 Attk, and Dwarven Sword+ has 18.5)
in general I wouldnt mind finding more Items, instead of just finding the same Dwarven sword over and over again, would be nice to finde a "+5" (or maybe more models)
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I've got to go to bed, it's late here and I've got work tomorrow, I'd like to comment the rest of the post this weekend (don't now if can post tomorrow, but I can have a look between times and read yours)
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something small I ment to mention before.. (just came back to mind..)
when foes are almost dead, on they're knees, ....there are not many options to chose from and not may reactions of the foes (they mostly just stand up again and attack, and a very few flee), more possibilities and reactions would be cool