Bethesda made Fallout 3's VATS system to avoid competing with Call of Duty and Battlefield, taking influence from KOTOR and Burnout: "Imagine the car parts are, like, eyeballs and guts!"

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.

"It’s up close, and most of the combat in Fallout is ranged," he continues. "We knew we were never going to be able to, with the time and resources we had, create gun combat that was on par with Call of Duty or Battlefield."

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For added context, Call of Duty 4: Modern Warfare came out in 2007, one year before Fallout 3, while Battlefield: Bad Company arrived in 2008. Trying to keep up with their genre-defining rivalry would be foolhardy. VATS, wherein time dilates to let you ready your shot, came together as an alternative, drawing from Burnout's cinematic crashes and a certain classic Star Wars RPG.

"It's sort of like [Star Wars:] Knights of the Old Republic at the time, phase-based combat, you can set things up," Todd Howard, director of Fallout 3, states. "And this game, Burnout, which was this racing game where you crash."

Howard describes a "little presentation" that pitched the idea to the wider team. "But imagine the car parts are, like, eyeballs and guts!" He remembers saying in the meeting. The notion was to provide space for strategizing, to some extent, even if it hampers the pacing.

"You could stop the game and your character can make some decisions," Howard describes. "And that's where you felt the stats of your character more than the run-and-gun, which we did a number of things with your character stuff there."

Even though VATS "still came together really well," Howard believes it "kind of handicapped" the gunplay. "It doesn't feel great in your hands because, you know, it's not the best first-person shooter, even for its time," he concedes.

Fallout 3 feeling like "Oblivion with guns" was only natural, Todd Howard says – the RPG was Bethesda's follow-up to, well, Oblivion

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