Well, the problem with the AI is simple.

The guys who prgramm the AI are not the best player themselves, so we cant expect, that the AI does any better than them!
I will do a quick list:

1. Open formation isnt used
2. even with more missles than you, he is attacking with melee
3. terrain advances are not used
4. army mostly is bunched up, so you can hit a lot with your archer
5. frontal movement all the time

Its terrible, it might be okay for easy or normal, but for hard its crap. We have to consider, that most people will be happy about the easy battles, i think the minority wants harder/better AI on the battlefield.
Still, as long there are programmer who are bad player themselves, we wont see the AI improving at all!

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