During a panel at PAX East The Witcher 3: Wild Hunt Senior Game Designer Damien Monnier explained how working on current generation platforms (Xbox One, PS4 and PC) allowed the studio to do things that weren’t possible before.
At some point they thought to do full fledged physical distraction with a lot of fragments flying all over the place, but they went overboard. It looked really cool, but not only it was very expensive (both in production and hardware-wise), but they had to navigate NPC and monsters through the rubble, so they had to dial back a bit. Yet, for instance, there’s a ruined house in the barrens that you can destroy. It’s completely pointless, but thanks to next gen, it’s possible.
Every time an NPC calculates that he has to go somewhere, he uses a bit of power. When there are 30 or 40 or more of them, it starts to get very costly, and this is possible in the new platforms.
Now monsters can be spawned very far away from the player, and if you kill a deer, it produces smell, then the engine calculates whether there are monsters around, and if they might be drawn to the smell. If they are, they might not like each other and fight without the player even doing anything.
There can also be huge battles between NPC.
In a situation during testing, the player was riding on a horse, and got charged by bandits also on horses. He started fighting, but monsters suddenly charged from the forest, making the bandits’ horses panic. After that, the monsters slaughtered the bandits.
Basically, making the game on current generation platforms allows for more characters, creatures, monsters and details like the horses panicking.