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But you can play the game without the need of two main islands.If you have a big northern island you can settle both cultures on one island and use the other islands just for resource gathering - like in Anno 1701. So you would still have only one main northern island (with two towns on it).
Technically you could also trade all the required goods so technically you could play the game with with only one island but it's tricky as you have to trade a lot for that.
There is a cheat that allows you to build all buildings as far I now - no mod needed. But you still depend on importing all goods then.
The main reason i like 1701 over 1404 is that design problem limiting my decisions.
Anno 1701 provided me fun scenarios where i had only one island left that was designed in a way that no enemy force could land there and that had unlimited amounts of iron so i had pretty much a small island that could create weapons and cannons all the time and sell them to traders and other factions/players, which generated enough income to pay for the costs.
That was fun, because it waqs such an unique way to play the game. Contrary to normally where you have to create towns and manage your gold income by taxes through your population, i had none but only a normal weapons and cannons production to keep me alive.
It was quite a hard thing to balance, but especially because it is a unique way to play the game Anno1701 stays the best Anno, it offers many ways to play a game apart from the casual way.
Anno 1404 couldnt provide that freedom, instead i feel you have to follow the generic meta.
Anno1701 allows for a trade focussed playstyle (one island with unlimited resources and a specialized production), a one city playstyle, a colony focussed playstyle or a trader (many islands exploiting many resources) focussed playstyle.
Anno 1404 limits that to half the possibilities.
Anno 1701 is vastly superior to 1404 in so many ways. Especially regarding freedom.
If this is your first, i recommend rather trying out 1701. Its downloadable on gog.com and you can even use the gog version to share it with a friend and make a multiplayer session.
It also still looks great and you can use reShade to even improve its look further.