It's fun that there are no other games like Uw 1 & 2 except Arx Fatalis.
This type of first person rpg is completely overlooked.

The Elder Scrolls games, though they sacrifice quality for quantity.

Super simplified compared to Arx Fatalis by Dark Messiah was pretty good. Actually did stealth gameplay decently.

Elders Scrolls does not count because dungeons are basically just fantasy FPS levels.
You just run through them to reach quest item/boss.

Dark Messiah is a great game, but it is just a linear hack & slash, not a game with a world to explore. I think what the OP wa looking for was a type of dungeon simulator, not a dungeon crawler where you just kill stuff to kill more stuff. There is tons of those out there.

Only reason I bring up Dark Messiah is it was made by the same team as Arx Fatalis, and even started out as Arx Fatalis 2. It has a lot of similarities (similar level up scheme, and interface) even tough it was dumbed down and linear.

I wouldn't call it dumbed down, it was designed from ground up to be a different type of game. The combat in Arx Fatalis was subpar, to say the least, while the combat in Dark Messiah is one of the meatiest I have ever seen in any game. Dark Messiah is a game you play for the combat system, the story and visuals are just to make the scenery more interesting to look at and give some context to your actions.

The only similarity to Arx Fatalis is the perspective, the awkward jumping and that you can see your feet. Even leveling up works differently; in AF you get experience points for fighting and solving quests, in DM you get one skill point for every objective you meet. AF is designed around exploration and rle-playing, DM is designed around killing stuff in different ways. Even when you play a stealthy character in DM you are encouraged to kill by backstabbing or kicking enemies into spikes or off cliffs or making stuff crash into them.

HiPhish the combat in Dark Messiah was taken from what was going to be Arx 2. However, the powers that be wanted Might and Magic slapped onto it.

http://www.polygon.com/2012/9/28/3425300/the-mirror-men-of-arkane

If you go into the files, many of them are still listed as "Arx".

You can blame the fact that it is was more linear (and the fact that its a different story) on the fact that Ubisoft got their hands into it, and made the developers change things.

I say level system is 'dumbed down' only so much that you are stuck more to a specific leveling tree (that is somewhat reduced in scope), where as in Arx, you could put points into a number of different skills. However one may guess had Arkane been allowed to make the game they wanted to make, that maybe the skills would have been divided a bit more. Levels probably would have been less linear?

I know that, but that decision was made early enough that the game was designed as what it is, they did not make Arx Fatalis 2 and then change it at the last minute. Wolfenstein 3D was mant to be a stealth game, but the decision to go for full action and drop the stealth was made in an early enough phase. This sort of thing happens all the time.

I'm not saying they had a 'completed game'. Just that Ubisoft liked what they saw, but wanted them to change the direction of the game.

Apparently they had enough of the new engine show off the new generation of combat, and that was what made the main feature of the game. But Ubisoft wanted them to take that engine and turn it into a "Might and Magic" game.

I say the name "Might and Magic" Is slapped onto the game, as the story and world really doesn't have much to do with Might and Magic either.

Although the necromancers in Dark Messiah remind me of the ultimate villains in Arx Fatalis in culture. There are a few other artistic details and in character design that are very "Arx-like". Although its not set underground, most of the time.

While they took the prototype established by the Ultima Underworld games in different directions, both the Thief series and the System Shock series evolved directly from the UWs. They're worth a look.

True... Alhough Thief has almost nothing like Ultima. In as much that a "Thief"-like class in UU is useless. Once you take that route playing a thief-game in Arx Fatalis or Rogue game of Dark Messiah is very thief like experience. Replacing the Blackjack with a backstab. Thief 3 and Dark Messiah have very similar feel. Both games also utilize the light gems. Plus DM has useable rope arrows like first two thieves, and can be used to sequence break in several areas! It's pretty clear that Thief was a huge inspiration for DM's rogue mode (even so far that the best Thief armor in the game has a nod to Garret)..

If we are going to move in this direction Deus-Ex (1 and 3) and Deus Ex: The Fall somewhat evolved from the UU line as well (some of the same developers/progammers IIRC). Deus Ex 2 is too simplified compared to the other two though unfortunately (although still a decent game that offers different playing styles).

System Shock 1 is built on the UU engine and is very much like UU in scifi silicon digital dungeon. System Shock 2 has a Deus Ex style leveling system.

I also hear some people compare Dishonored to a mix of Thief and Dark Messiah (also made by the developers of Arx and Dark Messiah). Although I still haven't had the time to get very far into the game, and see how the skill/magic system works in that game (so busy with many other games).

Umm? What? Ultima is the most inspiration game in history. Try these games on for a size.

System Shock- Big open world, RPG elements,false utopian setting, ability to respawn without penalty.

Bioshock-Big open world, RPG elements, ability to respawn without penalty and false utopian setting.

Deus Ex- Ultima meats the matrix with stealth

Elder Scrolls- Is just like this. But bigger and more to do. Daggerfall is the best.

Dark Messiah

There called immersive sims. They are meant to simulate immersion.

Checkout giant bomb.
Why thief though? I don't see many resemblances.

Check out Amulets & Armor, free version is released by author now. It's very similar to Ultima Underworld type of game.