Precisely how it should have been, but CA went all "movement points". This was the worst decision as though in theory the map allows for unrestricted movement (well almost unrestricted if you count walking the giants along the roads as unrestricted), it introduces a whole new game that the AI cannot handle. With the risk map this was a whole layer of AI that the developer didn't actually have to worry about. in fact leaving the risk map in place and concentrating on the battles and diplomacy would have been a smarter move. Unfortunately CA went for what was essentially the "marketing approach".
I know what you mean, but in all honesty the AI still wouldn't be able to handle it. We've all seen those RTS basebuilding games, where the pixies are fighting the trolls? The trolls build away like mad, as do the pixies, until their infrastructure is in place, then they start training more trolls and better trolls with upgrades etc. Then once there are about 10 trolls standing around in the "muster area" in the troll base, the trolls all rush off to the pixie camp, kill the lot and raze it to the ground. It's a very simple AI, and unfortunately that's the sort of AI that is controlling army stacks (and ships) in RTW/M2TW. It builds an army and simply sends it off to besiege a nearby settlement. Same as the pixies and trolls - just turn based.
STW/MTW are different because an army stack makes one move (like chess) and a good balanced AI can make the most of that one move. It's simple enough for the AI to handle and the AI can decide there and then if it has a chance of taking province X instead of dumbly sending out hordes of fragmented armies on suicide missions that are easily isolated and picked off by the human player.
The only time I found RTW remotely challenging was when the campaign difficulty was ramped up and the AI mindlessly spams army stacks at you, non stop - but that's not the kind of "challenging" I like.
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