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then on alternate chars you can send merit, which will enable them to go to Elite/Ultimate without having to beat the game, but your first char have to beat Elite itself
usually the recommended route is to do base game, AoM and FG, then Elite. however, depending on how fast you leveled, you can run into have exceeded the lvl cap in certain zones on Elite if you did base+AoM+FG, which will mean reduced XP for a while on Elite as you don't get xp for being too higher lvl than monsters you kill in overleveled zones; you still get xp for quests tho
if you already plan on playing to ultimate, on your first char, i'd almost say jump to elite now and wait with AoM and FG for Elite, that way you shouldfn't run into the issue of being overleveled for Elite, and then you can skip quick to Ultimate too
Ofc that would mean waiting a bit with the story, if you can hang on for that long
then on subsquent chars, my recommendation would be to, buy Ultimate Merit for alt, do base+AoM+FG on normal/Veteran on alts, then skip straight to Ultimate after, skipping Elite entirely, since specially if you use xp potions on alts, you will be massively overleveled for most if not all zones on Elite having done "full game" on normal/veteran
^hope it makes sense
If you want to jump difficulties early though, I'd do it after you get to the Coven. That'll cut down on your rep grinds later since you'll passively earn rep killing various monsters. You have to be in Malmouth for Malmouth rewards, so that's less of a loss, similar to the FG reps.
I have beaten the base game on Normal+Veteran.
Unlocking Ultimate difficulty requires you to beat the game on Elite with the same character (character that just killed the final boss and cleared the game on Normal+Vet).
So, my question is - does the story reset when you choose Elite difficulty in the main menu? I'm too terrified to check myself because if it does I'll be forced to skip AoM and FG content.
Damn, devs really should work on explaining this system more.
If you switch to ultimate later on, your will keep your progress on elite.
Keep in mind: there are quest which will provide skill points. It's in your interest to do them on every difficulty. Later when you get merits to unlock higher difficulties with new characters, this is not needed as it unlocks them on lower difficulties.
It's like starting on Normal, just that your character got all the progress it had on Normal saved, so lv and reputation is carried over, Rifts and Questprogress is not.
Believe it or not, the intricacies of difficulty system are not explained properly in the wikis and popular guides. And I didn't feel like diving into Reddit rabbithole to dig up this basic info.
One last question - will I be able to buy merits if I reach the corresponding vendor on Normal + Veteran? So that I could skip the Elite difficulty on my current character and start any consecutive chars on Ultimate.
so for elite merit you need to beat Warden on Elite with your char, for UItimate merit you need to beat warden on Ultimate before you can buy it and send to alts
https://www.grimdawn.com/guide/
and it has a section that discusses the difficulties briefly.
https://www.grimdawn.com/guide/game-settings/game-difficulties/
The Official GD Wiki also has a section covering the topic..
https://grimdawn.gamepedia.com/Difficulty
What these sources of information fail to describe is how exactly one switches to another difficulty and how this decision at the end of vanilla campaign impact DLC content (along with other details like being unable to skip Elite difficulty on your very first character, etc).
So all these wikis and guides are not that helpful in this particular matter.
The wiki and the Game Guide both spell it out quite clearly that you need to beat the final boss on each difficulty in order to access the next difficulty in turn. The ability to get merits to skip difficulties on subsequent characters is barely a year old - this feature came with the release of FG.
Difficulty Merits: https://www.grimdawn.com/guide/about/forgotten-gods/#q07
and again..
https://grimdawn.gamepedia.com/Difficulty#Difficulty_Merits
The question of whether or not to continue on with the DLC content on lower difficulties is a personal choice. As for "how" one switches I can understand how it might not be the most clear on that topic but nothing that some light browsing of your Main Menu options wouldn't reveal.