
Gun-based combat was one of several challenges presented by Fallout 3 for Bethesda. At the time, the studio hadn't developed anything involving bullets for years, leaving a blank slate for how it'd tackle shooting. This led us to VATS, and several influences went into that system.
In a retrospective for Game Informer, Emil Pagliarulo, a quest designer on Fallout 3, says they were conscious of the competition in first-person shooters. "There are melee weapons in Fallout, but most of the combat in Oblivion is melee," he recalls.