Morale is one of the big mysteries for me in this game. So far the only things I have noticed are:

a ) The side with the highest combat rating seems to gain morale per turn, the one with the lower rating loses points. The difference also seems to be dependent on how large the difference is.

b ) Defenders seem to loose morale at a slower rate if outnumbered ... but maybe just my imagination.

c ) If the morale approaches zero troops start to panic and don't perform any actions anymore ... aka you loose.

And that's it somehow. Nothing else. But it leaves my with this kind of "did you miss anything" feeling. E.g. I have not noticed any influence of how the battle is going on morale. When I engaged a bandit group with a significantly higher combat rating I was lucky to win. Not because it was a close call, no. I killed everything but a puny archer who started to run away from me. And I was lucky to get him just in time before MY troops started to panic. Come on ... that's not how it is supposed to be, is it? I slaughtered all his friends, he is running away and my troops start to panic? More explicitly I thus didn't notice so far:

1 ) Any effect on morale due to loosing hitpoints, loosing comrades or being under fire by missiles / spells in general ... and not "loses x point of morale" in particular spells.

2 ) Any effect on morale due to inflicting damage or killing enemies.

3 ) The general rate of increase / decrease of morale based on the combat rating does not change. One side lost half its army? Still looses (or even gains) morale at the same rate. In other words: the combat rating does not get updated.

4 ) Any tactical considerations with morale effect as e.g. being attacked by multiple enemies or being flanked / attacked in the rear ... yes, yes, I know. I have played too many games of the Total War series.

I may be wrong, overlooking things ... hopefully I am and I would be grateful for any correction. But as it stands right now Elemental's handling of troop morale reflects my overall general impression of the game. Good intention and vast potential, yet a so far rather poor implementation. Morale could have a significant impact on making tactical battles more fun and offers lots of further options. Think special abilities of champions like "Rally the troops", routing units after a "Blizzard" spell decimated half the army, troops hardened to magical warfare ... But right now its behaving rather unintuitive.

Rabenhoff