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Doing it on normal. And yeah, I'm upgrading my weapons and armor and synthesizing stuff while leveling. Up til that fight I had only done one random battle as things had been easy. So the sudden jump in enemy power caught me off guard. *L*
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Seems to me that synthesizing and upgrading is more important than levelling, but you have to level to get EP to upgrade stuff anyway.
It seems like the game's balanced for you to fight more random encounters than you would normally get while going from place to place in general. I was like level 5 getting out of the first dungeon and then the enemies outside were like L9-10 and completely destroyed me. I don't even want to talk about the boss out there...
I guess it makes sense considering how low the encounter rate is, but it's still kind of weird. Oh well, battles are fun enough that it's not too bad. (Yet.)
Also, if you didn't find out already, R1 instantly triggers battles on the world map/dungeon. Really handy if you need to grind.
This thing is sticky, and I don't like it. I don't appreciate it.