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To be honest, they improved quite a bit with Mask of the Betrayer, which didn't have these issues.
In the interview I linked above, Feargus said the experience with NWN2 as well as the fact that MOTB was smaller in general did help with making it more polished. It makes sense, considering that the first game you need to create a lot of new tech and are probably rushing to create the game with tools you've never used before. Probably a shitshow and tons of growing pains in the process of making that game.
It was an utter mess. I put a lot of blame on Ferret in the past, but Feargus probably did his fair share to make it worse (e.g. likely encouraging/enforcing a bog-standard save the world story, demanding they create a new renderer so they could make an xbox port they didn't actually have money to make). ~Josh Sawyer~ said that if he had been in charge of the project from the start, he would have kept the renderer the same (and taken the hit from graphics-whores) and focused on making the toolset more convenient and user-friendly.
I am not so sure that MoTB had improved encouter design. The encounter design was simply pushed back due to the story aspect of the expansion.
It was (particularly since there was so much less of it; pacing is important), but it's extremely difficult to provide difficult encounters in an 18+ campaign that the average player can beat. Josh Sawyer gave 'em feedback and they took his advice where they felt it was appropriate (e.g. optional encounters off the critical path), and ignored it when they felt he was pushing things to be a little too casual-unfriendly.
Moreover, Storm of Zehir was also an improvement combat-wise over the OC, though it also had its fair share of "skeleton crew overextending themselves" problems.