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Dunno if the AI cares about upkeep anyway - but when controlled by the player it's completely broken :P
I did not figure I was the first to figure it out, but I yes, I had not realised it was this OP. I was looking forward to playing wood elves but there's no point if the challenge level is zero.
I am an immortal, an eternal spirit of the woods. I stride through the shadows, my form a blend of grace and primal fury. My arrows strike with unerring precision, finding their mark even amidst the chaos of battle. My spear is an extension of my will, piercing through armor and flesh alike with ease.
The forest is my realm, and I am its ruler. The trees themselves whisper my name, the creatures bow in reverence as I pass. I am one with the spirits of the wild, their essence flows through my veins, granting me strength beyond mortal comprehension.
My power knows no bounds, for I am the chosen of Kurnous, the god of the hunt. My presence alone instills fear in the hearts of my enemies, for they know that they stand against a force beyond their comprehension. They are but prey in the face of my relentless pursuit.
So tremble, mortals, for I am Orion, the unstoppable force of nature. In battle, I am invincible, my strength unyielding. The forests echo with the tales of my triumphs, and my name shall be etched in history as a legend.
Beware the wrath of the Everliving Aspect of Kurnous, for it is a power that can shatter the very foundations of the world.
"buh muh duh its overpowered!"
its a singleplayer game
So depending on your situation, you might not be able to afford being at war with even, say, 10 factions, due to amount of armies you need to field to fight those factions.
It is more of a "win more" effect. If you are doing well, you will be doing a bit better(but at that point, it is not really needed). If you are doing poorly, a bit of extra upkeep reduction is not going to help you recruit additional units to make up for losses or creating new armies to deal with a new wave of enemies coming your way.
The obvious exploit is to be at war with factions which have no way of posing a real threat to you(most single army factions, like Rogue armies). But if you try to use it only against minor and major factions, it is not even that strong when weighed against the consequences(being at war).
A lot of factions can get 25-40% upkeep reduction and in a much easier way. Skarsnik has a 40% upkeep(and recruitment) reduction from the start, and he can also improve this to eventually reach 100%, if you want to.
Wood Elves are by far the tiniest of the major factions with the least interest of enacting wide-spread political change on the wider world and yet they saw fit to give them infinite armies.
It's like Snikch's stupid Thanos snap button, CA does things they think sound cool but have barely anything to do with the actual scope of capabilities any faction should have.
Completely and utterly wrong.
All that money you save from zero upkeep renders recruitment cost a total non-issue. And being at war with about 20+ enemies is easily doable as you have infinite armies and a rock-solid base that can't be easily invaded...not that the lobotomized WH3 AI would even try in the first place.
This was an utterly idiotic mechanic to implement´and even more idiotic that CA didn't think they needed to cap this reduction so you can't just have free armies.