I disagree. The entire point of "immersive sims" is the world simulation and interactivity aspect. Games like Ultima Underworld and Arx Fatalis aren't memorable for their plot, character system or quests, they are memorable for the interactivity with the world they provided. Ultima Underworld itself even started as a dungeon simulator, the Ultima bits were forced on by Garriott after the fact.
Now i don't know what went wrong with Underworld Ascendant but certainly starting with physics, world simulation and "that shit" was not the issue since that was the entire foundation of the original game.
I'm not so sure about that foundation part.
There is no doubt about world simulation being an important part of what makes UU great.
But the thing is, if you take all that stuff out, you will still have a functional dungeon crawler. In fact you will end up with a game that's very much like King's Field. No lighting, no physics, no nothing. Real, down to earth "explore the dungeon, whack the monster, grab the treasure". Simple enough, but it works. Mind at that point, that Neurath has stated Dungeon Master as a big inspiration for UU and DM is pretty much
exactly that formula.
And that kinda brings you to the problem with UA: If you take the physics and the lighting and the simulation out of UA, you don't end up with a fancy Dungeon Master. You end up with a broken game. You got some fucky AI in a broken environment with no real goal, a broken save system and lots of bugs and backtracking. All of that complemented by shitty, repetitive missions.
That's the real issue with UA. Not that the simulation part grew over their heads. The core essence of the game already didn't work out - in fact it wasn't even there.
It is definitely true that you can't
entirely ignore the fancy immersive sim bits while creating that base game (that fancy dungeon master) or it will become a mess to add later on. But I'd say you can design a basic game, which can - in a later development iteration - then be complemented by these simulation aspects. I think that's also what went on in UU and Arx.
To give you an example of what I mean:
Picture a hallway with a bunch of arrow traps on the walls. In the base game you gotta jump from tile to tile to get to the lever that deactivates the traps and opens the door to the next room. Simple enough. A functional basic challenge - you can put that in a game and it will work out completely fine.
Now for an immersive sim you'd introduce additional features that let you tackle the challenge in a different way. Like, you add physics objects and have the floor tiles react towards them (to activate the traps). Or you add a telekinesis spell that activates the lever from far away. Or you add a speed spell/potion that lets you run over the tiles without being hit by the arrows.
If your game's base architecture isn't fucked, all these features can be encapsuled in separate systems. In fact they
should be. And then you can always add them later on.
I think that's how you should probably go and design a game like that. Ideally you already know in the first development iteration (the base game) what kinda additional features you may want to add later on and then also slightly adapt your design process.
And that is what I think went wrong with UA. Otherside thought about the big additional features like burning stuff and feeding deep slugs and what not. But they didn't know what to do with it. They did not think about that hallway challenge first. Or maybe they didn't think about it enough.
And it awfully shows: There is this one room in - I believe - the first level of the game, where there is a sarcophagus in the middle and when you get closer spikes come through the floor. But then you can just walk through them, no problem. You need no speed potion, you need no telekinesis, no nothin, because there isn't even functional base challenge. And that is what
really broke the game's neck. Because the same kinda "we'll think about the basics later" mentality shows in pretty much all of the game's features. The lackluster mission board, the useless equipment, the trading system that is completely pointless as a result, the broken inventory system, etc etc etc. There ain't no basic game in there. There are traces, that were quickly hammered together in the last few months of development, but that's it.