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Not the root.
NEVER. It won't make oblivion stop crashing, but it will likely screw up everything else on your computer. Never mess with root directories like that...
If your modded game is crashing it's very, very likely to be those mods, and not the install location, that's the problem.
If you have a different DRIVE, try that instead. Create a Steam directory and point the install there, where you could isolate it from much more vital stuff than your root directory with your operating system on it...
Plain straight up nonsense to do that.
7 did not want you to put things there, 10 certainly shouldn't tell you to, no OS prior to those would have been okay with it for long because *it will screw things up* if you start moving or deleting files.
Seriously, put it in program files where it belongs.
If you have trouble with a MODDED GAME, it is 9 times out of 10 THE MODS at fault for any issue.
Reinstall the game completely from steam in its proper program files / steam / your common folder directory, with no mods and no changes made to its location. THEN carefully read all the instructions on the mod site's files, to see what went wrong on that end. Because I can guarantee you, it's not your steam install, or where you put it, it's a mod conflict.
This is where your games install by default, and shouldn't be somewhere else.
C:\Program Files\Steam (x86)\SteamApps\Common
If you're trying to install a mod, please read very carefully, and the whole description as well. If you're using a broken, or out of date mod, then that will be your issue. If you're using multiple mods, ensure you install them all correctly, and ensure they don't conflict with each other.
The mods are not the issue, I'm using the same exact mods I used on my crappy old computer and it was able to play the game and it has windows 7 and its better for older games like Oblivion.
If the mods works fine on Windows 7, they will work the same on Windows 10, unless you done something wrong, or using a mod that requires certain access to something's.
You do realize if the mod doesn't work because of a location, then that means this isn't a recent mod for the Steam version, nor is it correct for you. You need to edit the mod to redirect it to your folder, as that's basically the issue you're having with that unknown mod.
I've never EVER had an issue with creating and using a folder on the root of C:\. Saying it will break things it just utter nonsense. It will not break ANY functionality of using Windows. Microsoft locks down Windows folder with special permissions so you can't screw up anything. Yes Windows 7 locked things down pretty tight, and Windows 10 locks them down even more, but these are the Windows folders, not the C drive root. This is not true for the C drive. I'm a system admin and i work with software all the time that needs to be installed in special locations outside of the program folders, often on the root of the c drive. Also saying it's locked to the program folder and anywhere is will not work is also false. I've found many steam posts on moving the default steam folder to other locations/drives. I've put a steam game folder on C on multiple computers and have never run into any issue EVER. Please stop spreading doom and gloom on using a separate stand alone folder on the c drive... yes i know this post is old.
i also recall something with Microsoft about make "Games" folder ( 8.3 names ) something with lesser restriction, but as i recall oblivion aient that old it use program files. but op is right there are issue with then he use mod that extend Graphic and other mods, but this is actual a raised security app fault or rights in the system that has change.
but OP should know , noone get access to ROOT anymore.
also issue with old games some few patch has screwup its scripts and only work on C:
but they are rare. so make GAME folder and installer older game with game name under it. this is best option for old games. more a 8,3 file name issue.
and i also recall oblivion has a exit crash issue and there was a fix for this.
but OP should ask in Oblivion game forum or nexus forum. that problem i think op has require people have played it. and we all know Bethesda , it worked back then and then they dont go back and fix new issue on other OS