Oblivion has been a great disappointment for many people who played Morrowind, and hoped for a worthy successor. I don't usually use the term "dumbed down" (because people fling it around so often that it has become pretty much meaningless by now), but judge for yourself. Compared to Morrowind, Oblivion has ...
- less dialogue
- less quests
- less NPCs
- less settlements
- less guilds and factions
- less skills (e.g., axes and hammers have been merged into the category "blunt weapons" - yes, that's right, apparently axes in Oblivion are blunt)
- less armor and clothing slots
- less diverse landscape (mostly plains and forests instead of Morrowind's swamps, ashlands, giant fungi etc.)
- less dungeon sets
Also, Oblivion follows the questionable design strategy that a game must never, ever, ever, not even slightly, frustrate the player. To reach that goal, the devs removed anything from gameplay that could even remotely look like a challenge, or even (*gasp*) require you to think:
- Almost every enemy is scaled to your level. You'll never find an opponent that you can't beat. There is no area that you can go to when you want to have a challenge, because all enemies in all areas automagically adapt to your level, conveniently for you to beat them up. As a consequence, you can beat the main quest while still being on level 1 - actually, it's *easier* this way because you'll face the weakest opponents. Consequently, developing your character doesn't make much sense because the whole environment automagically develops with you. This includes creatures like goblins who become *ridiculously* strong over time just because *you* happen to have reached a pretty high level.
- All loot you'll find is scaled to your level too, and it's randomly placed. This means that exploration is utterly pointless in Oblivion. The ruin you haven't been to yet will have the same chances for the same loot as the ruin you've never seen. Treasure and monsters generally respawn within three days game time, so the game design actually encourages you to ignore 95% of all locations and just raid the same ones again and again. You'll never find any unique loot, no matter where you go (with a bare handful of exceptions)
- A convenient magical compass guides you through almost every quest, showing you exactly where you need to go. Some NPC sends you to a quest to retrieve a stolen item which has been hidden away? Don't worry, the arow will guide you first to the dungeon, then through the dungeon, then to the chest, exactly to the item, despite you never having seen it and never having been at this location. You're ordered to find a necromancer that is rumored to hide in the vicinity? Don't bother to look for clues, the magic arrow will lead you to the dungeon, through the dungeon, exactly to the necromancer. You never actually need to think, you just follow the arrow. If you actually *want* to thing, gameplay simply breaks down - NPCs never give you usable directions because they assume that you just follow the green arrow so that no directions are needed.
- You never have to meet any requirements to advance in any guild. Your orcish fighter can easily become archmage, and he doesn't even need to cast a single spell to do that. Great roleplaying experience.
- You never have to make any meaningful decision. Joining a guild doesn't have any consequences, your character can join all guilds there are. There is no rivalry between any two guild, actually guild members won't even notice that you're also a member of other guilds. The guilds basically *ignore* each other, as if they all lived in separate universes. Again, great roleplaying experience.
In short, Oblivion is pretty much the epitome of a design failure. It's fun for a while, if you like action games that come with a thin RPG veil. But as soon as you find out that developing your character is pointless, that you'll never meet a challenge, and that you can't actually make any meaningful decisions, you wonder why you actually enjoyed the first few hours.
If you buy Oblivion, I strongly suggest installing several mods. Personally, I use the whole FCOM package (OOO, MMM, Fran's, WarCry, etc.), plus dozens of mods that at least try to address the issues mentioned above. It's amazing what modders have done for this game - I couldn't bring myself to playing it again if it weren't for these mods.