With all due respect, I have already completed the Impossible mage no-loss challenge, and I used mainly offensive spells right from the start, as my mage was low on leadership throughout the game. First of all, you NEED to use offensive spells as a mage, as you need 600+ fire-based spell casts to get the Fire Mage Medal lvl 3, so unless you get on working on it right from the start (and use them at least twice per battle! Max fights is about 300, so 300x2=600), you may miss out this medal. So I did start using Flaming Arrow/Fireball from the very beginning as means of reducing the enemy stacks. You can view the info you need in the high score thread, as well as download a save game just before I ended the game. The boss battles were another thing, though. Using offensive spells against them is a waste of mana, especially on impossible, so the army has to do the trick. On normal it's... normal to use spells vs. bosses, as they are low on health - twice as less than impossible, and a 10k astral damage can hurt them quite a bit.
If you are referring to the cheesy KBTL playstyle where Black Dragons + Glot's armor + 2xArmageddon were the "I win the game" button, this is no longer easily applicable here (as you will suffer certain losses). That tactic in KBTL did not need any army, only a sizeable amount of mana, a lot of intellect, destruction and higher magic. However, we are playing a different game here, and we need to adapt different tactics.
The Gift Bag is a bonus "campaign" - actually, it's bonus items, some of which provide resistance against astral damage. Have a few of them equipped and the Argageddon tactic may work pretty well as a mage.
As for the damage, how about 3x8k damage (meaning death star hitting 3 enemies and no allies) for a mage? 24k would seem like a good deal. How about 7 enemies (that's the best I managed in my game)? 7x8k=56k would seem a whole lot better.
It is my opinion that if you give it a try, you may start feeling otherwise. Believe me, I thought the mage is way too underpowered for quite some time. I no longer do so, as my playthrough has clearly shown that the mage can do wonders with her spells.
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