Oblivion’s leveling system, although just about exactly the same as Morrowind’s, is pinned into an area of dissatisfaction thanks to the game’s punishing enemy scaling. Where Morrowind saw the player character become godlike whether they wanted to or not, Oblivion’s player characters stay, at best, equal with the world around them and only when messing about with lower difficulties as the game progresses.
This is only true, of course, when you play the game naturally. If you take the tedious time required set up a class that’s going to be leveled efficiently, Oblivion suddenly becomes a very fun game of hop, skips, and careful jumps through levels. Very fun is subjective, of course, and actually pretty inaccurate some of the time, but I’d be lying if I said that the idea of starting up a run right now just to rush 100 endurance wasn’t at least in part enchanting.
Despite loving Morrowind infinitely more than my passing affection for Oblivion, I like the games for two different reasons. I don’t care for Oblivion’s story, or combat mechanics, or dialogue, or roleplaying opportunities. All of that love goes straight to Morrowind. With Oblivion, I just love trying to optimize characters and the world they live in. That’s it.
It’s actually a pretty shameful reality to acknowledge, but if Oblivion had a much more lenient enemy scaling system, I’d probably like leveling much less, but everything else about the game much more. And, somehow, I don’t think I’d make that trade.
You see, Oblivion occupies that space in my mind that doesn’t want to be tampered with. It isn’t perfect, or even above average most of the time, but it serves its purpose for someone like me who wants to learn to optimize a game in an extremely punishing and tedious environment. This is the same kind of fun that can be had in a game like OSRS or Dark Souls (though neither game is comparable to Oblivion in very many ways).
Morrowind and Skyrim have better leveling systems, and yet I find neither of their leveling systems as satisfying as Oblivion’s leveling system. It’s backward, it’s unintuitive, and punitive. And I love it (and hate it.)