well sorry guys, i may have overstated, your ideas are great, but i was thinking more along the lines of a what if situation, thou some things wouldn't be lore correct, see i like the idea of a reunited kingdom, bring my now two favourite factions together.
ive noticed on the campaign map, what brings stablization apart from the unit balance, is the postioning of every facton on the campaign map. I thinking of an alternative situation, where Gondor has been over run, causing the populace to flee and seek refuge among the Arnor
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Most of middle earth has been over run, with smaller tribial organization/factions such as Umbar, wainriders establishing independant kingdoms due to the expansion of there empires, All Evils factions would start of allied with unbreakable alliances. Invasions are constanty sent into North West of middle earth, the only remaining free lands of good.
It would be built only to play as good factions, probably as reunited kingdom, which would have mix roster of both Gondor & Arnor troops, but kept & only buildable in specific regions. This could allow the player to set up his own Gondorian/Arnoian armys trying to give personalization much how
Roma Surrectum II does with it legions, the only suriving factions would be men, dwarfs & Elves, but postioned (settlemented control altered in parts of the map) to display some sort of front line being forged, such as elves covering the bottom flank and approach from the seas, dwarves covering the the top flank, with the reunited men covering the center.
There not meant to be a storyline for it, thou im still putting it together in my head, but is basically an alamo of middle earth, where you are considerberly outnumbered and must rely on hard earnt battles and strategic deployment on the battle map to win against numerous odds. Money would be improved as this would be more military based then economy base, your worst enemy would be not trying to deplete your unit force pools. Thou this could get tiresome or tedious, constantly battling with no real objective but to retake middle earth, it would be more for people with my taste in a sandbox. I would include things to keep the incentive for people to continue playing, such as the legion effective with some traits, new hybrid units, showing Gondor & Arnoian units developing knew tactics.
Also do somthing with the AI diplomacy for good guys, givin strongest relations as pssbile, and possbiliy doing somthing with reducing the required cost when asking a friendly nation to preform a deed, such as "attack faction or take X&Y settlement" so you can get asistance easier and more realistically, the AI won't hang in the pack when you expand, making playing along with the AI more important to achieving victory
i think its more for Gondor, Arnor fans,
Alternative idea - was to do the same, but allow for it to take place in the "last alliance war campaign" which would take place over the dead marshes to Barad-
dur with low tier castle acting as camps(non upgradble), but all units being available for recruitment,
idea are alot weaker when writtin down, it does sound better in my head

think i was to excitied while explaining it

but it would be more of a fun thing