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Blast into Victory
Gratuitous Space Battles is a lot of fun, but as the scenarios become more difficult it can become a very hard game to win. There is a lot of planning involved, and the feedback received from your losses doesn't always reveal why you were defeated. Worse, it is entirely possible to miss a basic element of the game's strategy without ever knowing.
This strategy guide will outline a few tips on how to win. Using these tips will be more than enough to beat every scenario in the game on normal difficulty and most of them on hard.
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Love Thy Fighters
Fighters are amazing. While they at first seem like a waste of time because your pilot limit in the early scenarios don't allow for use of many of them, they become very important in the latter half of the game, so much so that victory without them is nearly impossible. They're great because they counter almost everything. They counter fighters, they counter frigates, and they even counter cruisers (although it takes some time to punch through cruiser armor).
I recommend building your fighters fast and using standard fighter laser weapons. Turning fighters into torpedo bombers can work well in a few cruiser-heavy challenges, but the weight of torpedo modules make fighters so slow that they become vulnerable to enemy fire. I don't even recommend armor - speed, really, is king.
Once you have some good fighters built, deploy them! Particularly in scenarios where the enemy makes heavy use of frigates and fighters. A good contingent of ace pilots can cream both in short order.
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Shields Trump Armor
Shields rule, armor drools. Okay, there are some exceptions, particularly in scenarios where shield effectiveness is cut in half. Generally speaking, however, shields are better. The details are explained in my weapons and armor guide, but in summary shields have greater resilience against damage over time. Making use of shields in preference to armor will dramatically increase your effectiveness in most battles.
However, you do need some flexibility in your strategy. Some armor is always a good idea with cruisers, and often with frigates. While any ship will be in trouble once its shields are down, armor is an effective way to keep a ship kicking just a little longer. Also, there is a mechanic in the game which reduces the effectiveness of each new shield module placed so as to keep players from stacking shields too heavily, so more than three shield modules tends to be a waste.
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Learn AI Settings
Manipulating the AI settings of ships in the deployment screen is absolutely crucial to victory. If you go wrong here, you could well lose a battle even if your fleet is great.
The editor for AI settings allows you to set target priority and range. Target priority is simply a system of telling your ships what to attack first. I almost always set all of my frigates and cruisers so that enemy frigates are given top priority. Why? Because they explode easily under concentrated fire. Taking down enemy ships quickly reduces incoming fire. Once the frigates are down, your ships can mob the enemy cruisers.
Range is a bit more finicky. The range dictates at what range the ship with choose to engage a given target. This can be finicky because if you tell a ship with short-range weapons that it can engage at long ranges it may very well choose to hang out behind the front line doing nothing at all, so be careful to match your ship's range setting to the actual range of your weapons. Also, don't mess with range on fighters. It seems that setting the range high causes fighters to disperse greatly, wandering the battle aimlessly.
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The first basic rule of deployment is to concentrate your firepower. Deploying your ships in a wide, broad line might look cool, but it isn't always a good idea. It is advantageous to you to have more ships at a particular part of a battle than your enemy, so grouping most of your forces at once side of the battle usually works well. It works particularly well if you build one or two high-armor/shield cruisers and place them on the other side of the battlespace in order to bait the enemy ships on your flanks. By the time they defeat your heavy cruisers, you'll have mowed down half their fleet.
A second, related principle is to deploy ships which counter an opponent's ships as close to those ships as possible. For example, if the enemy deployment has a large amount of cruisers flanked by frigates, deploy your fighters so they're as close to the frigates as possible rather than near the cruisers.
Lastly, remember to account for differences in ship speed when deploying. Placing all your frigates and cruisers together virtually guarantees that your frigates will reach the enemy by themselves. The cruisers can't keep up. Instead, place the frigates near the back of your line and the cruisers at the front. This way they'll reach the front line at around the same time.