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I'm making a "newtonic variant of dwarf fortress", and I am sticking to Blender's game engine. I plan on using the Cython compiler to get my extra-libraries in a decent format, but that's on the far end of the list. (Also my Editor of choice is gedit, and I'm working on a DVORAK vortex pok3r… let's not start a holy war about speed vs. extra keystrokes, ok?)

Aside from that… I've made my concept art in GIMP, and depending on if I get far enough to do actual textures / sprites (AO ftw!), I might enlist Krita or Toonboom.

As for music and sound… once everything else actually works, I'm confident that a solution for this will come along.

Another Blender Engine user... Honestly I so rarely see any documentation on it that I have no idea its capibilities.

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Actually, the API is very well documented, but due to the prevalent tutorial-culture, this is often ignored. Also people tend to claim things are "not suported" because they didn't find youtube-tutorials for them. (like realtime IK for example).

Another big problem is that people, attracted by Blender tend to see logic-bricks and fall prey to the Dunning-Kruger effect (and some features are only accessible via the API). I'd claim, it's very much as capable as other engines (I'd consider the editors more powerful, tho), but - very much like using Blender as a video-editor - there are a lot of convenience features missing, that one has to implement first. Of course, if you're comfortable with reading manuals and working with APIs, all that could be considered a bonus to the already decently integrated pipeline. - You could in theory do everything but music without ever leaving blender. (and I'm sure people more inventive than me could use it as a sequencer as well ;) )

Edit: Heck, if you're comfortable with using python's OS library as a bash replacement, you could probably replace a whole desktop environment and most of it's software (save a webbrowser) with just blender. :D