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First I would of borrowed Skyrim's engine "Creation Engine" and continued to utilyze the Havok's Behavior Toolset for Character Animation But I would of worked it more to give a bit better animations while in 3rd Person view.
Next I would have placed the setting in the future after the events of Skyrim, that way Dragons could be in the game and players could go on select missions to become Dragonborn.
Next I would remove any type of Forced PvP from the game and instead relied on the deep lore of the myriad NPC factions and Guilds to give rise to player PvP. Guilds/Factions/Orders such as Companions, Imperial Legion, Stormcloaks, Fighters, Mages, Thieves, Blades, Mythic Dawn, Dark Brotherhood, Bards and maybe some of the lesser known factions. List here: http://elderscrolls.wikia.com/wiki/Factions
Then I would have implemented an enmity system whereas certain factions were hostile to others. This would allow world PvP to thrive but those who wished not to partake could of stayed clear of certain houses and factions.
Next I would have opened up the entire area of Tamriel and allowed the building of houses in and around the villages and cities that already exist. ALl housing would of been in the open world. I would of then designed the game to be completely seemless except for the various dungeons and other points of interest that you can wander into.
I would then turn my attention to the class system, I would have kept the class names listed here: http://elderscrolls.wikia.com/wiki/Classes I would also allowed the use of creating a custom class by picking and choosing the various skill lines but kept the perk system that was in Skyrim.
I would not implement an Auction House but would implement a mailing system. Any trades would be done through face to face contact and the setting up of bazaars in the various cities.
I would not have a global chat system, instead the chat system would only cross player guilds, NPC guilds, and shout/say distance.
Speaking of crafting, that would be handled by the class system, whereby you could actually create a crafting class which did nothing but craft all day and not have to kill a thing. You would have to rely on adventurers to gather though, or you could sacrifice specialization points to pick up combat skills to gather them yourself. I would also add in a Carpentry Skill which would be the only way to build houses, or you could buy already placed housing plots in the game world. The gathering skills would be universal, anyone could gather anything if they ran across it.
Next I would allow the formation of 40 man raids and give Raiders the opportunity to tackle various Bosses that were placed in the world or in non-instanced dungeons.
I would also implement some sort of political system that allowed players to become Jarls or other heads of houses through various means.
Now onto Combat, I would allow the use of 1st and 3rd person combat and kept the reticule based combat system but I would not allow the use of a soft locking system that the current TESO game utilyzes.
As for questing, I would keep the TES style of quests. Complete with a working HUD or Compass like the single player games. Quest givers would be like any normal NPC, meaning you would have to talk to NPC's to find out if they had a quest to give you. None of this hand holding Yellow outline stuff TESO is going to use. My TESO would continue with the tradition of all TES games to allow the player to wander off the path and discover their own way and both questing and exploration would be just as optimal.
Finally I would make it so certain NPC's sold items, some of them being magic most not but each NPC had their own inventory like the TES games. I would also allow the killing, Stealing and placing baskets over NPC's head but doing so would make the player a PK (PvP enabled). SO if I saw you stealing from an NPC I could kill you without penalty and even be rewarded for killing the "Sneak Thief". This would allow the Players to police the world and to limit the potential for wholescale slaughter. For those NPC's that were murdered they could be resurrected by other players or often times some other NPC would take over their shop or offer that NPC's quest. Something like the local chieftain or jarl could assign someone to take over their shop after a certain period of inactivity.
Thats about all I can think of for now.