I have seen a lot of posts and comments about armor rating providing diminishing returns, with the supposed cutoff point being somewhere in the 350 to 450 range. My gut feeling from looking at the
damage reduction equation used by FO4 and FO76 was that this wasn't the case, so I built a
spreadsheet to run the numbers. I see nothing special happening in that range, and survivability continues to increase at a pretty constant rate at any armor rating.
The Damage Coefficient equation that both games use looks at the incoming damage per shot and the relevant armor rating (ballistic or energy) and turns it into a damage coefficient (1 – Damage Coefficient = Damage Reduction). Higher damage attacks translate into a higher damage coefficient, so things like sniper rifles and yao guai swipes do better against armor than miniguns and rad roaches, even if the damage per second is the same. It also provides diminishing returns in terms of damage resistance. What seems to be overlooked is that damage resistance inherently provides increasing returns in terms of survivability. The result is survivability curves (calculated in terms of an effective health multiplier) that are very linear. If you're looking at the spreadsheet, you'll see the effective health multiplier curves are only slightly curved, and continue to increase at a pretty constant rate at any armor rating. If there were diminishing returns at some point, you would see them go dead flat, which they don't.
Effective health is a measure of how much damage reduction magnifies your health (effective health multiplier = 1 / (1 – Damage Reduction)). If 50% of incoming damage is being blocked, you will survive twice the amount of incoming damage and your health is effectively doubled. Where it gets interesting is that, as you approach 100% damage reduction, the amount of damage that makes it through becomes minuscule and your effective health approaches infinity. At 90% damage reduction, 10% of damage makes it through and your Effective Health Multiplier is 10. At 99% DR, EHM is 100. It has increasing returns. Unlike investing directly in health points, your EHM also magnifies the effectiveness of incoming heals, meaning it increases your sustained survivability, an important consideration for tanks.
In Skyrim, armor rating translated linearly into damage reduction, and with the right set of armor, it was easily possible to reach an armor rating that translated to 100% damage reduction, and infinite effective health. Skyrim solved this problem by having a hard cap on damage reduction of 85%. Without it, just putting on a helmet to increase your DR from say 80% to 90% would double your EHM from 5 to 10. For better or worse, the cap meant that there was often no benefit from maxing out your smithing skill, armor skill, wearing a full set of armor, or even wearing heavy armor over light, since you could reach the cap with a well improved set of light armor. FO76's system instead balances it out by making 100% damage reduction impossible to reach, while still continuing to provide additional benefit from additional armor rating.
Another interesting thing, if I'm reading it correctly), is that the 42% damage reduction from a full set of power armor is applied before the armor rating damage reduction is calculated. This means that not only are you reducing damage by 42%, but you're being kicked up to a more advantageous damage reduction curve. It's like having a higher damage threshold as well as increased damage reduction, if this were using Fallout: New Vegas' system.
As a Fallout modder turned professional video game programmer and aspiring systems designer, I have to say Fallout 4/76's damage coefficient equation is one of my favorite things in video game systems design. It elegantly accomplishes two things: a more organic implementation of the damage threshold introduced by Fallout: New Vegas, and a solution to the problem of damage reduction having massively increasing returns.
TL/DR: Armor rating in Fallout 76 does not have diminishing returns
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