The Remaster is amazing and one if not the best remaster ever at least on the level of Metroid Prime remaster or Ninja Gaiden 2 Remaster.
But the Skybivion team has nothing to worry about as it could very well still end up being better and last longer.
While the remaster if amazing and some people wanted to have the same jank, there's also a lot others that would end up enjoying Skybivion more as it'll feel more like a remake because while the remaster is mostly just a nice graphical UE5 pasted on top of the old engine with some additional enhancements. it's still the same game. So I don't see the Skybivion team being worried in the slightest especially if they got some stuff that people would enjoy it more than the remaster. They're probably looking at the remaster as a friendly competition and motivation to work even harder and to further improve on what the remaster lack. Plus like mentioned before they already got some things better.
With Skybivion,, it's not just a skyrim pasted on the old Oblivion with some enhancement and graphics like the UE5 pasted on Obivion. The Skybivion team actually went much further and redesigned entire towns, dungeons, locations, and other things making it more immersive and more logical. Like a town being bigger, more populated, extra locations, dungeons not being the same. There has already been some people not feeling immersed enough in the remaster cause towns are too barren especially the Imperial City, art style, or the game being mostly the same and wishing more. Skyobivion would have lots of redesigned dungeon to make them much better and different. Not to mention keeping the more vibrant art style and making them even better. NPCs right out the bat should also look more appealing and less like A.I generated freaks. And as time goes on the hype and honeymoon phase will get weaker and weaker.
Plus the later most important thing that would immortalize the game would be mods and mod support definitely goes to Skyobivion with the already matured creation kit from Skyrim. And since the Skyobivion team were already planning to try and releasing this game by 2025 2 years ago and still plan on it even now. That means that it should be nearly finished and not just one of those projects that's still a long far off so Skyobivion already have most of the things done. At most it'll probably be delayed to early 2026. At that time the Oblivion remaster thing would die down and most people would be trying out Skyobivion.
For us Elder Scroll fans, it's the best of both words since people get to try out remaster and have fun for a long while and by the time everyone is bored of it, Skyobivion is right around the corner. And then later in 2026 we might get a Fallout 3 remake/remaster and then hopefully Skywind late 2026 or early 2027.
