User blog comment:DeirdreKent101/Population Decline In the Elder Scrolls/@comment-4057437-20120731032240

Yes, we have noticed. It is mostly due to hardware limitations, especially Consoles. The current batch of NPC's are much more detailed, both in appearance and in behavior, than those in earlier games. This takes its toll.

Some games, like Fallout New Vegas, split up the game into more zones to get around this, (the "suburbs" of New Vegas, for instance).

If a game isn't strictly PC, this will continue to be the case. The next generation of consoles should give the game writers/programmers more room. New software, such as Unreal Engine 4, should also help.