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Some monsters can inflict Stability loss, but it's not universal.

Monsters that are particularly shocking, or that exude some kind of psychic pressure, can definitely force the investigators to test against Stability loss.

However, the main use for Stability as a stat is that you can call for the investigators to test it to keep a cool head in terrifying situations. Even if a monster can't lower the investigators' Stability, you can still call for Stability tests when it's around. Investigators that fail might run, or call attention to themselves, or accidentally safety their gun/release the magazine, or otherwise make a bad judgement call due to nerves.

You can definitely do more traditional rules and have all supernatural monsters and situations cause the players to test or lose Stability, but it's optional.

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This is great information - thank you!  Perhaps a line or two to this effect in the book’s section on Stability, or perhaps at the start of the monsters section.  Many veteran Cthulhu gamers are used to taking sanity losses when seeing monsters, so maybe a few words such as you have written here in response to my query would be a helpful addition to the text.  Thanks for considering!  (And great game!  Cthork Borg is fantastic!) - Brian C.

Thanks!

The layout's a bit precarious, but I'll squeeze an explanation into the top of the monsters section. You're absolutely right, it's a little different from the standard, and a lot of folks will expect routine san loss otherwise.

I should have a patched version up by end of day.

All set!

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Great stuff!  Thanks for the edit!  What you've done is a remarkable, creative piece of work...bravo and  hats off to you, sir!  

Thanks! It's been a lot of fun to write and test, and I'm happy if people enjoy it!