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Bethesda licensed for Oblivion the facegen SDK to control and animate their heads ands faces. They took their own meshes and used the technique to do these really awesome facial animations.

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Yeah that was the first thing to pop in to my mind when I looked at the SDK. Also I'm pretty sure the FaceGen was used when you decided on the characteristics of your avatar when starting the game.

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Same Yeah, FaceGen was using in Oblivion for the faces I think...