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The problem is that it appears to not matter how much damage the Axis does in 1941, the Soviets rebuild and reports are that they can almost shut the Axis down in 1942.  '42 and '43 is where the major fights should be occuring, offesive and counter-offensive, but if its degenerated to trench warfare in '42, something is off.

Those reports in 42 AFAIK, are all from 1.03 games (or games that upgraded mid-game and aren't valid tests of the 1.04 changes). 1.04 had a lot of changes, some of which should open things up some in 42 when playing the 41 Campaign. I don't agree that the casualties in 41 hardly matter, but we'll need to see more games with a greater variety of players before we can say for sure. Changes to fort building in 1.04, just to name one thing, should have some impact in 42.

Joel, I play both Germans and Soviets. Knowing what is capable by both sides in 41 and 42 I can't see how the Germans have a chance anymore. I think too many wheels have been taken off the bus. In games with evenly matched players who both know how to play their side my money goes on the Soviets every time. You can't rely just on AAR's. Sure a good German can run rings around an average Soviet, but the same goes the other way around. It's a mute point. There needs to be some well thought out crystal ball stuff by your top line testers as well (unbiased ones that is). But how many play both sides? If they exist I would value their input more than the AAR's.

There have been some reports that the Soviets can launch effective offensives in June and July of 1941 that can really throw off the Axis - and the players are starting to realize it (I think Michael T is one of those that has reported that).  Effective offensives were completely ahistorical at that point.  The Soviets simply didn't have the C2 for that, especially with their cumbersome early war armies.  They did launch offensives to be sure, and they bled the Germans, but they took much worse than they got.
 
On the other hand, pockets didn't go quietly or quickly, and inflicted a lot of casualties on their own as well, so the game doesn't handle that very well either.
 
Maybe the combat engine needs a tweaking, and the early war Soviets need some arbitrary penalties on their offensive ability to reflect their poor C2 and generally being unprepared for the war?
 
Of course that starts into a whole other discussion....
 
 

There have been some reports that the Soviets can launch effective offensives in June and July of 1941 that can really throw off the Axis - and the players are starting to realize it (I think Michael T is one of those that has reported that).

No that wasn't me. But the automatic retreat that comes with a Soviet 1:1 is questionable in my view.