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But maybe I'm wrong. It's just that when you puppet them, you don't have access at much more of their civilian factories than when you just took the lands so with no compliance. But it will increase over time, while the puppet system gives you a fix proportion of their factories. As soon as their is factories I always annex except if I want to steal the manpower. But even if I need it, I just let them a single area of their territory in the peace deal anyway.
Right but what im referring too is more like Eritrea and Somalia. Both are single state nations with only 2 building slots. You get a -50% building slots for non core states, so this means you wont get back even the second slot until 39. Or even worse would be states that are wastelands with 0 slots. A minor nation can still spawn factories in wastelands through the minor nation focuses.
When i release states, they get all building slots, as well as focuses that add free slots. This means by 39, the same Eritrean state could have up to 10 factories. Yes, you only get 25% of civs, but thats at a minimum 1 plus the civs they trade you for resources.
I also tried the strat of releasing into puppets, and found it really weak in practice for a couple reasons.
1. The released states, seem to avoid the industry tree, and get random useless stuff like army XP. Even if they eventually get around to it, it doesn't matter if it 4 years later.
2. You have no way of getting there dockyards which they get 3 free from naval focus. Which is just wasted factories.
3. The lower building cap for non-core matters less than you think, because of the industry techs. You will probally be 2 or so levels ahead of the AI meaning, you will almost be able to build as much as them.
If you puppet or satellite a nation while in the peace deal, then yes they start at the highest level. But if you annex them and then release them, they become protectorates.
Also the building cap is 2nd to the fact that any nation receives 7 factories from focuses regardless of building space.
I play Italy and go after France before they join the allies. Releasing Eritrea, Somalia, and Ethiopia all give me a minimum of 3 additional factories just, which at 15 around factories in early game is 20%. Taking States like Niger from France has no purpose other than to require garrison. Instead i release them and they end up building multiple factories inside the Sahara, which is a wasteland and would not provide any available factories under any other circumstances.
I should have not mentioned Yugoslavia because what im really talking about here is useless lands that would otherwise be used for nothing but a radar station. I release Syria, Loas, Cambodia, and some of the Sub Saharan states.