So much fun stuff to talk about.  Let me start by owning up to a mistake that I made.

  In my faction differentiation thread I talked about adding new traits and abilities for pre-designed units.  When you asked if those were specific to various factions I said that they were open to anyone, because I wanted players designing their own units to have as many tools as possible.  Many people cautioned me against that, and you were right.

  I have been living in faction differentiation land and been doing a lot of work detailing exactly what each faction can and can't do.  Though I like a player's ability to customize his units, it has to be secondary to the differences between the factions if faction differentiation is to mean anything.  This became more important as we added more abilities to each faction.

  I always get excited when we start to talk about abilities that may be too powerful to balance.  Can Yithril start all the trained units off at 2^nd level?  (yes, but they won't get access to ranged units).  Can Kulan have an ability that allows him to take control of enemy beasts in combat? (yes, but it has a range of 1 and a 2 turn casting time, you better be able to survive 2 turns of cave bear attacks if you want to capture one).

  We won't have all the new faction abilities in by the start of Beta 3.  But there will be enough that you all can start playing with them and providing feedback.  One of the ones we were focusing on last week was Magnar.  They can't build any growth improvements, no Inn, no Pub, no Brewery, etc.  But when they defeat men or fallen in combat (be they bandits or enemy armies) they add them as population to the nearest Magnar city.  And they keep the ability to take population from the cities they raze.  People aren't flooding out of the wilderness to join Mangar cities, they need a bit more proding.

  Magnar doesn't get any new weapon or armor.  But they have a new unit type they can design from.  If you go into the Unit Design screen you have Male and Female at the bottom.  Some factions have other options they can design on, for Magnar that’s slave units.

  Slaves don’t have any training cost and you don't have to pay them wages.  You still need to pay for the training time to make whatever weapons and armor you give them, and their stats aren't very impressive.  At some point you will want to use real Quendar units if you are already spending the time to craft valuable armor and weapons.  But for good cheap archers, warg riders and militia, slaves work great (and you can't beat 0 wages)

  We used to have the conscripts trait that was attempting to provide a similar benefit, but it didn't work as well.  Now there is a nice visual distinction between the larger Quendar units and the smaller slaves they are marshaling into battle.

  Magnar also gets access to unique spells.  Death Lash makes a unit dramatically more powerful, but then kills it at the end of battle.  Cull the Weak kills one of your own trained units but heals the caster and gives back some mana.  For Magnar their cheap slaves are fodder, have fun with them.

  Another piece of feedback that I took to heart was that a lot of the damage types and resistances were underutilized.  In general the differences between weapons and their impact on other armies or monsters didn't mean as much as I wanted.  I was being too subtle.  So I went through every monster and gave them dramatic strengths and weaknesses.  Trolls are all vulnerable to fire, Ice Elementals have no defense against blunt weapons.  Naja and Stalkers are immune to counter attacks.  Ogres all have bad spell resistance.  Nearly every monster has areas where it is weak, and areas where it is strong.

  The same thing has been done with armies.  Armor has been rebalanced and instead of being 50% more effective against certain damage types it is 100% more effective.  Abilities have been added to all weapons.  Swords all have counterattack.  All axes have backswing.  Spears still have armor piercing, but they also make the unit immune to counter attack.  Hammer type weapons don't have an ability but tend to be big, slow and do lots of damage to make up for it.

  What weapon you use matters.  And many of the factions have special versions that drive this even further.  Krax has one handed versions of the spears that they can use with shields.  Umber has scimitars that have backswing and counterattack.  Pariden has a staff that shoots lighting.  Yithril has a great axe that has armor piercing (it's devastating).

  Another example, races now give a bloodline trait.  Ironeer's get +6 to Spell Resistance and an additional Hit Point per level, but their tactical spells cost 50% more than normal.  This applies to trained units and any Ironeer champions you recruit (regardless of what race you are playing as).  It also applies to any custom sovereign you create that has Ironeer as their race.  All Pariden units get a minor boost depending on the amount of shards and the type of shards you control.  All Wraiths get -1 hit point per level, but they heal 3 hit points whenever they kill an opponent.

  We have a lot of faction differentiation work to do, but it is coming together nicely.  Now that the base game mechanics are there and working, we can have fun polishing and creating all the special stuff that makes it special.  Thanks again to all of you for providing feedback and I'm looking forward to more when Beta 3 releases.