There are some solid arguments against Arena's, and while I don't agree with many of them, and others are outright bunk (like stating that they have to be like WoW), there are some that raise real concerns.
The biggest issues are actually rudimentary problems: there are only so many PvPers, and Arena's will put even MORE focus on player-held view of class balance.
What are Arena's
However Zenimax decides to do it, Arena's are essentially a system of small-scale battles between players. Team versus team, instead of army versus army. The difference is in the numbers, which could be 4v4 instead of 400v400.
Why are Arena's Important
PvPers, much like PvErs, are not all made equal. Some love grand fights with large armies, siege engines, objectives and massive effect. While the games that are dedicated to this are few and far between, they are remarkable in the loyalty they generate with their playerbase. Dark Age of Camelot and the first-person shooter Battlefield series are two iconic elements of this.
But there is another section of PvPers who love smaller fights between generally evenly matched opponents. For these players, there are literally a ton of games out there to support them, from the Call of Duty series to World of Warcraft and it's many replicants.
Some prefer the smaller battles because they are capable of being more evenly matched. Others prefer them because they require less planning and strategizing. Some have limited time to play and would prefer a few quick matches to one long losing battle. And for many, the PC/network requirements to handle hundreds of players on the screen simultaneously aren't in their budget.
Making Cyrodiil Invalid
Sadly, out of a given playerbase, there is a limited number of pvpers. In some games this percentage is much more than in others, with ESO and its focus on Cyrodiil possibly giving it an edge.
Many feel that if you add another form of PvP, those who might enlist in the battle for Tamriels most valuable province would go elsewhere. And they may be right. How many pvpers, like myself, roam the countryside in Cyrodiil, occasionally engaging in a one-sided fight, that might go elsewhere?
Another side to this argument, though (equally as hypothetical), is how many players who don't have the time or energy to fight in Cyrodiil would gladly take up the mantle in a quick Arena match?
If Arena can draw more possible PvPers into the fold, is this necessarily a bad thing? Or will it only encourage more players to request massive changes to Cyrodiil to make it more friendly to this other type of gamer?
Making Balance Impossible
As I've argued more than once, players put into ANY competitive environment ask for nerfs and buffs. Even in PvE only games, players request massive changes to the game to fit their own internal perceptions of balance. This happens in every MMO, and even in single-player games. How many Skyrim mods were made that simply altered the power of a weapon or skill?
But small-scale fights seem to ENCOURAGE the calls for balance passes. What we see happening in Cyrodiil and in Trials is a glimpse of the end result: player a killed by player b, complains that player b is overpowered, but player a is underpowered.
The real issue, then, is not that the calls for balance will come, but that the game mechanics and classes themselves aren't built with small-scale balance in mind. How do you develop balance along a premise of four classes, when each class can fulfill any role with varying degrees of success? What happens when players who up with nothing but light armor/destruction staff sorcerers, and that is the only type of fight you can get?
How do you shape content to keep this in check?
The solution to these is two fold, and requires:
Making Cyrodiil Important
As of right now, the campaign system and it's 90 day cycle, as well as it's emperorship and constant struggle, are in limbo. Not because any of the mechanics are faulty or broken. No, it's because WINNING and LOSING has no effect. It's all off in it's own zone, ignored by the masses.
If mechanics were put into place that allowed the masses to be effected (by NPC's, mind you, and in small ways), then the impact would become more pronounced. Instead of the deadric mini portals, now we get Covenent raids into Ebonheart Pact zones. Siege machines outside major cities. A land under fire.
Tabula Rasa implemented a similar system to reflect the state of the war in that game. The secret, though, is how this is handled. Spawning some NPC's to otherwise harass the player isn't too difficult of a system to do. But what would encourage involvement?
Tying the spawning of the NPC's to the campaign you have chosen. Didn't choose a campaign? The a default scoreboard that averages the campaigns is assigned to you. Encourage participation and make each land feel as if it is fully under the threat of war. Make the players want to go and take back Cyrodiil for their home zones.
And obviously, PvP rewards need to be amped up. Experience gain in Cyrodiil increases. Loot drop increases. More achievements, titles, costumes, dye options, and even new motiffs only earned through PvP. Make Cyrodiil not only something you WANT to participate in, but also something that rewards you for doing so.
Making Arena's Fun, but Not Important
Ah, a fine line. Most players are used to games where grinding arena matches is the only way to acquire certain high-level armors or perks.
Instead, award players with new emotes, achievements, titles, costumes, but leave the experience gain and loot drop out of it. Head it off as being 'practice' fights, not to the death. Make the overall experience less serious, without breaking the immersion of ESO.
If you add leaderboards, don't focus on kill/death ratio. Instead, focus on style and finesse. Let players earn points in a match for correctly timed blocks, interrupts, and rolls. Bonus points for heals, debuffs, buffs and cleansing.
Make the entire endeavor about how WELL you played, not about who killed their opponent faster. This is the prime issue at the moment with Trials, and would make or break Arena if implemented.
Immersion, and it's Virtual Reality
Arena's are a common element in Elder Scrolls lore. However, making it immersive and fun while not detracting from other elements of the game would have to be a must.
One mechanic to consider is only allowing same-team arena's in your home zone. So that players of Ebonheart Pact are fighting each other in the Arena, not other alliances. Again, reiterating the 'practice' and 'sport' elements.
Another mechanic might be cross-faction arena's in dangerous zones, like Cyrodiils Imperial City or Bruma. Let players enter temporary neutral grounds, possibly, to sign up and compete against each other no matter the faction.
Finally, it's important to keep the mechanics and elements true to Elder Scrolls lore. Arena's weren't always to the death, they were small fights, they CAN include PvE elements, and they are something people spectate.
This isn't time for an e-sport, but it could be something fun for ESO overall.
Too Long, Didn't Read
Improve Cyrodiil to have an effect on the outside world, and improve it's rewards. Make Arena's less important by focusing on player skill moves scoring more points that kills, and not rewarding gear/skills. Both advertise to various types of PvPers, and could support each other if done right.
Ruze Aulus. Mayor of Dhalmora. Archer, hunter, assassin. Nightblade.
Gral. Mountain Terror. Barbarian, marauder, murderer. Nightblade.
Na'Djin. Knight-Blade. Knight, vanguard, defender. Nightblade.
XBOX NA
Ruze is a veteran of the PC Beta, lived through the year one drought, survived the buy-to-play conversion, and has stepped foot in the hells known as Craglorn. He mained a nightlbade when nightblades weren't good, and has never worn a robe. He converted from PC during the console betas, and hasn't regretted it a moment since.
He'd rank ESO:TU (in it's current state) a 4.8 out of 5, loving the game almost entirely.
This is an multiplayer game. I should be able to log in, join a dungeon, join a battleground, queue for a dolmen or world boss or delve, teleport in, play for 20 minutes, and not worry about getting kicked, failing to join, having perfect voice coms, or being unable to complete content because someone's lagging behind. Group Finder and matchmaking is broken. Take a note from Destiny and build a system that allows from drop-in/drop-out functionality and quick play.