Interesting concept. It’s fun to think about strategy. For my winning game against AI, I started by moving up only, keeping a defensive position. Then I started infiltrating the enemy territory (since converting a tile is better than getting a grey tile).
Once game gets to mid-game, both players moves will generally flip a tile, so it’s more about positioning. Merging works well here – by merging, you give up a few turns of converting tiles, to gain a unit with higher damage power. It’s much faster to send one +2 unit into enemy territory to kill 3 enemies than to send 3 Lv 0 units.
I think there’s some potential here for fun concepts. Maybe supporting even more players (up to 6?), or having different arena shapes, or different units.