Yeah, the hero-turned-villain is a great story and I think we'll defintitely get around to it some point. A lot of our monster groups are definitively non-human, but not all of them, and even the monstrous ones are often open to human influence and manipulation... Fun stuff!
Unlocking such a villain with a game event is not too bad. I think the villain story would still be a crafted one, with the hero plugged in, for the reasons listed above. But yeah having "achievements" or similar mechanisms that unlock additional stories feels good. Though, incentivizing players to kill their heroes for meta reasons does not..
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