I play Venice a little weird, in that I almost always convert Milan into a castle. I find that Milan's my least profitable province (probably has something to do with the lack of ports), and I usually capture Milan at a point where its population allows a relatively painless conversion to a Citadel. Genoa, Venice, Florence and Bologna are subsequently left cities, and they produce my extravagant income.
(Exception: One time with Venice, Sicily declared war on me early, so I converted Bologna into a castle and just kept it a castle after taking Milan and Genoa. Bologna's usually not quite as profitable as Venice, Florence or Genoa, either. Don't know why. It could just be how I develop the respective towns.)
While I respect the argument that every one of the five "Northern Italian bloc" cities should stay cities, I find that it's just so much easier to reinforce against HRE / French incursion when one of the five is a castle, as units from that castle are easily able to be sent to any of the cities in jeopardy. Also: as great as the militia units are, I have a soft spot for Feudal Knights and Venice Archers, with their superior range and defense, make better garrison units.
I usually find an early alliance offer and some degree of tribute to the Pope are sufficient to allow me to declare war on Milan without substantial consequences. I also benefit tremendously from the ol' "mass-recruit priests, send them on missionary work, build up their piety" strategy, which usually enables me to dominate with Cardinals. Often I'll play Venice by allying with everyone near me but Milan, bribing HRE for Bologna and grabbing Florence early, then going after Corsica and Sardinia, and then just staying put, until the current Pope dies and one of my priests inevitably replaces him. Sometimes I'll actually try to declare on Milan just before the Pope dies, as if my Cardinal is in great shape to be elected, he'll have a lower-then-average opinion of Milan going into the Papacy role.
Oh! I'll also give the Pope Irkalion. That's a pretty valuable part of my strategy. The island is very useless to me, so I've alternated in past games between giving Irkalion to the HRE (for Bologna, instead of a traditional florins bribe) or to the Pope (more useful if I've just suffered a slight blow to my status with the Papacy due to a war declaration on Milan.) I'll send my Irkalion units to Durazzo to win the prize, then leave the city torn apart for the Byzantines; then they'll march through to nothern Italy and end up assisting with Milan.
I like to take out Milan relatively early. Usually, if Milan's conquered Dijon, I feel I've given them too much time. I like to take Milan and Genoa out fast, and then rebuild my rep with the Pope after the damage has been done with Irkalion, bribes, and eventually cathedrals. (Venice is in great position to build one before other factions do.)
Once I've consolidated the five powerhouses of northern Italy, Corsica, and possibly Sardinia (Sicily occasionally beats me to the latter), I build up Milan (or Bologna) into a Citadel, the others into Huge Cities, and basically turtle for a while. If possible, I try to hit up north Africa (Moors territory) with crusades. It helps to have north African territory prior to declaring war on Sicily -- sometimes I even purposefully leave a northern African crusade target empty after conquering in a blatant attempt to convince Sicily to march from Tunisia and declare war so I don't suffer the bad karma.
Then it's Naples, Sicily and (if necessary) Sardinia, and now I have all of Italy outside of Rome under my control. I find it's really easy to subsequently keep the Pope on my good side -- he's almost always a Venesian pope, which helps, but I guess the fear of being surrounded by Venice keeps the Papal States in a subservient mindset.
I usually go for Iberia next and not Byzantium, but that's largely because the Mongols / Turks / Byzantines out there all frighten me, and expansion into Greece usually leads to Hungary and the Byzantines declaring war on me, and then I'll finally take Constantinople only to learn it's a favorite jihad target a turn or two later. (And even the Mongols join jihads! Never a good thing.)
Iberia is comparably safe. From a pure geographical standpoint it makes sense to move my capital to Sardinia, so I often do so. Start with the Moor territories -- Cordoba and Granada are usually still Moor-occupied at this time and the Papal States will be happy to see them eradicated. Crusades into these territories help immensely in terms of keeping troop levels high for low upkeep.
Usually in the early game I ally with one Iberian power and simply acquire trade rights with the other. Most recently, I allied with Portugal, then manipulated navy positioning so that Portugal would be forced into a war against Spain (with me.) Then I just take all the Spanish provinces, but I don't usually have to worry about Portugal double-crossing me. (Portugal has this irritating strategy in my Venice games of always taking Ireland, which makes eliminating the faction next to impossible. Spain is easier to eradicate outright.) Leaving a recent Spanish acquisition defenseless leads Portugal to declare war, they take the Pope popularity hit, and I consolidate Iberia, signing peace only after they've been restricted to Irish territory.
Next up has differed on my game: once I was hurting with Papal favor and the Polish took the Papacy, and despite being allies with Poland the Polish Pope didn't like me much. So I went across Africa on "crusades against the Holy Land" that never actually reached the Holy Land (or simply abandoned the holy cities after conquering them.) My real goal was Egypt proper, taken along the way. I find the Mongols usually don't mess with Alexandria, and I usually keep Gaza as a border. Eventually I end up dealing with Timurids, but never Mongols, from that position.
As a sidenote, I somehow convinced HRE to give me Bern for Antioch and tons of florins that game, but the poor HRE lost Antioch about a dozen turns later.
Another game, however, my relationship with the Papacy was better, and France made the mistake of blockading a port of mine, so I was able to go against France without risking excommunication. Started with Marsielles (from Genoa) and Toulouse (from Spain.)
After either Egypt or France, I always try for the New World when it opens up (really doesn't even matter which faction I'm playing!), but my final push is almost always for Byzantium -- in fact, I often prefer to leave Constantinople for my final conquer needed to win the game. Leaving Byzantine for post-gunpowder makes sense because you go from a huge tactical disadvantage to a huge tactical advantage against them (if they're even still around: one of the two times I played as Venice the Turks controlled Constantinople by the time I got there and Byzantium had been relegated to Rhodes.) I'll take all of Greece and even declare war on Hungary if necessary to acquire the settlements needed, though by that time, I'm such a clear powerhouse that half the world has declared war on me out of sheer desperation anyway. =)
To summarize: With Venice, turtling a while in North Italy during the "early-mid game" really helps: you'll build an immense amount of money and likely deal with few attackers. (I've never had HRE come down on me 'til much later in the game, assuming you've gotten the HRE to give up Bologna.) Like the Sicilians and Milan, Venice can go a little out of their way with sails to take on non-Catholic targets, namely the Moors, which helps tremendously with preventing any alienation from the Pope. Bologna, Venice, Florence, Milan and Genoa can all reinforce each other in a single turn with paved roads, so if any one of those is a castle, you can basically mass any unit you need to wherever you need it. Finally, it's all about taking Milan out early -- any way you can -- and you'll need an excuse to take Sicily out soon thereafter. If you succeed in consolidating Italy (minus Rome) as any one of the three Italian factions, and if you've done so without risking excommunication, you've basically won the game.
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