BTW, "THE ELDER SCROLLS V: SKYRIM", actually still under examination, since it's only being filed so recently 7/13. It's Notch has the high ground (got a published trademark since 7/29). "The Elder scrolls" from 2 very old registration claims are not the "upcoming main battle" here. (It's nearly unchallengeable, but "SCROLLS" will challenge it in legal ground anyway). And whether a trademark is distinguishable or not, is not just word to word comparison, but more of an association related.
Hypothetical : When "SCROLLS" as a registered trademark, people will think about hey it's that game "SCROLLS". And people who don't know about it, but heard about "THE ELDER SCROLLS", and heard someone said it's a hit, MAYBE thinking it's the same line of products, and go to buy "SCROLLS". The publicity cost used in pushing "THE ELDER SCROLLS V: SKYRIM" will be transfer to Notch, who may not have much money putting into publicity campaign. It's stealing publicity (pushing brand takes efforts and money). So trademark has to be distinctive enough, or targeting different clienteles/market (and why there is class different). Since they are under the same class, it has to be somehow identifiable.
And it's not those who actually "knew(a lot)" about "SCROLLS" and "THE ELDER SCROLLS" need to be tested (most of us probably won't qualify), but those has potential to buy both of them, and haven't heard or knew either of them need to be tested. Then see if they can associate the trademarks with different products. Shorter trademark often has advantage on its side. The controversy still exists, since SCROLLS are not somewhat unique as Minecraft. But it's possible that the registration agency considered it alien enough for a game's name. Consider the situation in reverse, and a trademark for game "Fortress" already exist (which it is a trademark just not games) and popular (probably not existed). Now we try to register a trademark "Dwarf Fortress" (BTW, it's not registered or filing for yet). It must be feel like "Dwarf Fortress" is just a particular version of "Fortress". But in reverse it's not the same situation. Since DF probably be more "popular" than any game ended with fortress. A trademark for a game called "Fortress" may be associate with something new. (A FPS game with players storming fortresses maybe?). So it IS possible that Notch's claim of "SCROLLS" as registered trademark CAN hold in the end. (If it gets super duper hit and almost every kid in the world knows about it)
And if "SCROLLS : NEXT VERSION" do exist. Then to people who don't know either of them, when using a name like "SCROLLS V : SKYISLAND", will it not easily be confused with "THE ELDER SCROLLS V: SKYRIM"? It's not just the current use need to be checked. The future uses too. And in THE ELDER SCROLLS the "scrolls" in it isn't anywhere close to the main features. (It's probably one good reason why both pass the registration examinations). You can't register an APPLE selling company APPLE. It's meaning is not the distinguish element in trademark. But the derived implications about it should be used to distinguish trademark.