After playing a few custom naval battles to test the AI (on expert, of course) I found the quality of the AI very good. The AI makes very good use of wind direction in plotting course, and takes into consideration weather factors as well in planning its attack (at one point they waited for me to come about on a hard starboard tack in a westerly gale and holed me under the waterline with a well-timed broadside). The timing of their tacks is very good, and they almost never allow themselves to be in irons; generally difficult to get a raking broadside into the stern (this is a huge morale downer for the affected ship).
Fleet battles are a bit more micromanaging but probably has the simplest controls I've seen in game about fighting sail. Controlling fleets in line has never been easier (any admiral of the age would've probably given two limbs to have such tight control over their lines of battle ). The only complaint I would have about fleet battles is that the AI tends to keep running all of its ships as a group throughout the battle. Problems arise when a ship is disabled in the path of their fleet, and while they do try to change course, they try to do it grouped thus a general course change is taken rather than evasive maneuvers and consequently a few of them would inevitably get caught in the explosion to come.
Overall, very satisfied with the expert AI on naval battles; its definitely challenging from a tactical standpoint in both solo and fleet battles, and you can't hate the graphics either
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