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There will definitely be an arena in the game. There might even be several. Like Kvatch originally had an arena to go with Oblivion and the series as a whole was originally meant to be an arena battle simulator. I'd be interested in seeing how PvP arena fights are done though.
That's a good point, the game was originally supposed to be an arena combat game. I can see many areas/arena-like structures around. Some local, tribal fighting rings would be cool for say the khajiit and so on.