First, we need to know how that corresponds to the inventory system and other features. Considering there is a dummy (just for clearness sake), you put the weapon on the hand(s) slot and it turns to "sheathed" mode automatically (attaches to your back) or, there can be no dummy (like in Gothic) and you just 'check' the weapon in inventory. Then, it can either be unsheatehd automatically once the battle begins (again, not sure how that works in AoD), or it is unsheathed manually (spending an AP on it if in battle-mode, or not?). For insatnce, you can't initiate combat if your weapon is sheathed - you just get no "attack" cursor or option (but of course you can initiate it the other way, either in dialog or by some other action) -- this feature, btw, is very important, cuz it will differentiate stealth-fighters from head-to-head ones - daggers and short swords (and other small melee) do not need to be unsheathed to attack someone (that is, they are sheathed in such a way that it's just matter of seconds to get it ready for stabbin'). Of course, the act of unsheathing your weapon must be noted by the bystanders, so that they could react accordingly (like in Gothic) - unsheathe their own or even strike you down at once. Of course, the act of unsheathing/sheathing weapon before attacking is a real-time action, so it might even require some sort of reaction (OMGNOO!! - cry the pnphardkorers), but I don't think it's THAT glaring. By the way, it should be noted that, in my opinion, unsheathing a weapon does not start a battle-phase all by itself: otherwise this distinction between stealth and full-force is unfeasable. You could unsheathe your twohander and just walk down the street -- the reaction may be bad or neutral, or even fear - depending on your stance and reputation, but it does not automaticall enter the TB-mode of combat. That is, if you unsheathe the weapon, your target will see that and unsheathe his own (or not, depending on who he is and what's his reaction), that is gaining the chance of getting initiative or blocking your attack, so there is a distinction between sneak and direct attacks.
Anyways, my point is that visual representation depends directly on the mechanics, not the opposite.
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