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If those conditions are met, you may demand Kent from Flanders and they'll likely want Luxemburg (and some money, and maybe help in war) in exchange.
In general, it's pretty difficult to trade lands, and even if you achieve something that seems like a fair trade, giving a province away tends to tank the Opinions and 'taking' province away from someone in that way will anger their friends.
While I appreciate keeping the charm of the original KoH, a proper diplomatic window to set up trade offers and a deeper way to manage your provinces (setting up vassal states or independent kingdoms) would be really amazing. I kind of understand that it is set up that way to make it harder to cheat AI out of stuff, which is something that plagues games which have the usual barter system, but even ability to counter an offer would go long way. We have Princesses, non-aggreession, trade deals, but no way to reliably offer any of it.
Sorry for the off-topic rant.
As for barter, we just need better AI.
I completely agree. The diplomacy really seems lacking and in KoH1 you could not counter-offer but AI could which was just unfair. And while I think loyalty should have an effect it should not be too limiting when it comes to gifting land. I think it should be possible to sell and buy provinces too. Creating vassals out of conquered land was something I have always wanted in the first game. Closest thing to it was when your crusader restores some fallen christian kingdom or restoration of Papacy event, which was rare.
It seems like some good things from the first game like freely giving away provinces is just not in the KoH2 for some reason but some limiting or should I say not-so-perfect things of KoH 1 have been transfered to KoH 2 like lack of counter-offer.
There's also a third option, but I just saw it crop up once and didn't use it, that may show up whren you have a Diplomat (? I'm not sure if that's the trigger) bribed, that lets you vassalize their kingdom if they're smaller than you.
As for the province trading... eh, I see why it was done that way. Stability-wise, non-loyal provinces are a burden and with possibility of Famous Rebels letting rebelions fester is much more dangerous in Sovereign. I just wish that didn't come with penalties, you can easily lose 150-300 relationship by acquiring one that way and I wish your vassals were included into your culture loyalty-wise, so that you can trade territories with them freely and they don't suffer penalties from being influenced by you.
I haven't played for months due to nearly no news that I've seen from the devs but in my experience you're better off just warring for land. While you only get 10% of gold income the benefits of being able to build trade buildings for something you desperately need like barrels or coal or some high level item that isn't being traded at that point in the game is much better than dealing with a vassal and slowly installing yourself as ruler. I did it as an RP thing and it was kind of fun but totally avoidable.
Edit: In addition to what DNLH stated, if you've gone through all the trouble of creating a vassal through spy actions and your puppet is the leader of the independent province If you have cultural dominance over the state I believe there will be an event option that will let that province officially join you. It could, as mentioned, also be done through diplo actions but I'm not sure about that. From what I remember I had cultural dominance and the leader installed was a puppet then slowly they joined my kingdom after multiple wars fought against common enemies.