Luck in Oblivion is a hidden but influential attribute that affects nearly every aspect of gameplay, primarily by modifying your skills and influencing chance-based events. Here is what Luck does in Oblivion:

Effects of Luck on Skills

• Luck does not govern any skill directly nor does it increase skills beyond their natural cap of 100.
• When your Luck is above 50, it provides a bonus to almost all skills (except Acrobatics, Athletics, and Speechcraft). Conversely, Luck below 50 imposes a penalty to those skills.
• The formula used is approximately:

SkillModifiedByLuck=SkillInQuestion+0.4×(Luck−50)\text{SkillModifiedByLuck}=\text{SkillInQuestion}+0.4\times (\text{Luck}-50)SkillModifiedByLuck=SkillInQuestion+0.4×(Luck−50)

This means for every 10 points of Luck above 50, you gain roughly 4 points added to all your skills behind the scenes. For example, at 70 Luck, you get +8 to all affected skills

• However, the Luck bonus does not count towards skill perks, which require the base skill level without Luck's bonus to unlock.

Effects of Luck on Gameplay and Random Events

• Luck influences many chance-based mechanics in the game, such as:
  • The likelihood of your Repair Hammer breaking after use.
  • The odds of winning bets in the Arena.
  • The chance for special weapon effects, like Mehrunes Razor's Daedric Banishing, to trigger.
• It impacts the initial health of gladiators in Arena betting, improving your chances of winning.
• Luck does not affect loot drops from containers or leveled lists

Strategic Considerations

• Investing in Luck early can provide a broad boost to many skills, helping raise your character's overall competence.
• However, leveling Luck is less efficient compared to investing in other attributes because it requires four Virtue points per level and provides a smaller return relative to the more focused boosts of other attributes.
• Luck's bonuses stop being as impactful late-game when skills approach their caps.
• Since Luck does not boost Acrobatics, Athletics, and Speechcraft, players focusing on those may find Luck less beneficial

In summary, Luck in Oblivion acts as a universal skill modifier and a hidden factor improving your odds in various random events, making it a subtle but valuable attribute, especially early in the game. However, it is not a direct skill and has diminishing returns as you progress