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So in the current meta, here is how a war with a weaker faction will play out.


1) Kingdom is pushed back to having little or no fiefs, Vassals begin defecting.

2) The Kingdom will then begin hiring every mercenary company available.

3) They will spawn at the former capital faction and raid nearby villages.

4) Raids inflate war score, to the point that the losing faction demands tribute for peace but your kingdom will be heavily against it.

5) If you do manage to make peace, the losing faction will just continuously declare war on everyone in a vain attempt to recoup fiefs.

6) You are now stuck with constant raids by merc companies who never defect from losing kingdom, which never dissolves unless you execute every member of ruling clan.

There are several things that need to be addressed about Merc companies to alleviate this issue.

1) Time-based contracts: Mercenary companies should only serve a Kingdom for a set period of time (perhaps 6 months to a year).
2) Non-repetitive contracts: Mercenary companies should not be immediately rehired by same kingdoms once contract expires.
3) Mercenary cap: There should be a limit on how many companies can be hired at one time, perhaps 3-5.
4) Abandoning a losing war: Mercs are not loyal and if they take repeated beatings, they should leave their contract as there is no money to be gained.
5) Faction based hiring: Factions should not be able to hire companies they are at inherent war with, i.g. Aserai hiring Ben Hasai.
6) Negotiation with hostile mercs: Players should be able to barter allegiance of hostile merc companies to either quit serving a kingdom or join them instead.
7) Hirable from a menu: The player should not be forced to track down the leader of a Merc company to discuss contracts, it should be available from the kingdom menu instead.
 
I feel that mercenaries should have their own strongholds so that they can replenish their soldiers easily. I saw in the previous versions when some mercenary lords are going around with 10 soldiers or less. And I agree with you if the faction runs out of money or they have lost too many men, they can break the contract and leave. Isn't there an issue now that factions run out of money employing them?
 
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