As it is now, having 1 worker in 10 cities generates the same commerce as 10 in 1.
Other benefits to ICS include:
Who cares if someone just nuked one of your size 2 bases? You have hundreds more where that came from, and not much invested in that particular city. Someone nuking my size 15 city with many improvements, on the other hand...
With 10 size 1 cities, I can build 10 cheap units each turn with rushing. With 1 size 10 city, I can never produce more than one unit a turn.
Placing cities that close together means that any city under thread can get reinforcements from multiple cities close by. Cities reaching higher sizes by necessity need more room so will not have as many cities close by.
Using SMAC as an example, up to 10 excess shields get carried over to the next project. With small cities, they rarely produce more than 10 excess shields so waste at the end of producing stuff is minimal. Larger cities will have command of more shields, making it much more likely that their full production will not be utilized. If they produce 50 shields and only need 20 to finish the current build, 20 shields are wasted. Decreasing the amount of shields carried over to the next build exacerbates the problem.
Civ 3 attempts to curb ICS
What it comes down to though is the phrase I quoted initially. If one size 10 city can outproduce ten size 1 cities then ICS will be less powerful from a pure gameplay point of view, hence will not be used.
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