The Answer:
1. SEGA: According to this post the Dev's weren't totally happy with the balance when it shipped anyway.
2. Auto-Calc: (IMPORTANT NOTE: The following Piece is a Theory only, I may be wrong).
This is the BIG one IMHO, and explains how the game got so unbalanced and how it was so hard to fix.
I believe that for most of the main balancing part they actually used the Auto-Calc engine to run their tests, this would be relatively simple as Auto-Calc is quick to do, can probably be made to give more detailed information than what we are actually given and is simply a cut down version of the main engine, so in theory it should perform pretty much as the full graphical engine does. However we know that isn't always true, the 2-Hander bug for example has no effect on Auto-Calc.
Whilst we don't know exactly how Auto-Calc is cut down too much, we do know for example that combat is pure calculations and animations have no effect.
Thus what I believe is happening is that in both game engines everything runs off calculations in the background with what I call an "animation override" in place in the Graphical engine. So if the animations dictate something different to what the calculations say should happen, the Animations get precedent.
e.g. With 2-handers: The calculations run and dictate X number of hits. It then instructs animations to play out to achieve this result. However because of the Bugged animations none actually happen and nothing happens, no hits are scored by the animations and this overrides the calculation meaning the next stage (determining how many hits actually kill), has zero hits to play with and can't kill anything.
Another point is that if 2 sides fight and one has faster animations they can get more kills in than the calculations might suggest, also anyone cut down in mid swing in the Graphical engine subtracts from the hits, whilst in Auto-Calc it would have no effect.
It also raises another point. Densely packed units, (i.e. situations where 2 or 3 units are one on top of the other), or situations where several units are packed back to front and side to side with each other would all not benefit from arrows hitting anyone other than the target unit as only the calculated number of arrow hits will be scored, and only against the unit that is being targeted.
That in turn raises an interesting point about enfilade fire. In auto-calc, shooting from the flank won't get you any extra hits because the number is calculated according to some accuracy value, thus any extra arrows that would fall on the unit in the Graphical engine are ignored by the Auto-Calc engine.
NOTE TO HA FANS: I'm not say enfilade fire IS over-powered in the Graphical engine, just that it's probably stronger than in the auto-calc engine. Which is the intended level of power, only CA knows.
I can't prove it as theirs no evidence, but I suspect it might be the case that whichever bit of bugged code is causing the Shield Bug is also not used in Auto-Calc, thus the shield bug slipped through.
Overall I suspect they used Auto-Calc to get the majority of the balancing done as apparently the animations COULD have an effect in RTW too, but something about the min attack delay cut these effects to almost nothing. So they probably expected the same in M2TW and didn't worry about the animations and other stuff being cut out.
Thus the only times the balancing team would have used the Graphical engine would doubtless have been right at the end of play-testing when they wanted to look for any IMBA that was happening because the player could out-think the AI. (i.e. player Exploit finding). With the 2-Hander bug being introduced so late on i don't doubt that they had very Little time in which to re-balance the 2-handers relative to the animations (they'd probably realized animations mattered now), and probably didn't have time to pick up on the problems relating to all 2-handers being bugged vs. Cav.
Likewise, we know CA wasn't happy with the balance at release, but we also know that they didn't know about the shield bug, (they sounded surprised to learn of it when we found out about it), so it's equally clear that whilst they knew their was a problem, they had no clue as to what it was.
Don't get me wrong, I'm not trying to say that CA didn't make mistakes, they did. Just that a combination of rushing them at the last minute, (when they had time to discover the animation related bugs), and coupled with them possibly using the auto-calc engine for most balance testing has probably resulted in the bugs getting through. they simply didn't know about them until too late to even figure out what was causing them.
Of course I could be wrong and they could have used the Graphical engine for testing from day one, but using the auto-calc engine makes more sense as you can run more tests in less time.
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