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I am not sure what's changed. Maybe it was a recent Windows Update?
Anyway, this game was running fine, and all of a sudden it stopped working.
Failure mode:
Dosbox initializes fine.
Encountered behavior:
Pre-game menu starts fine:
Choose option 1 -> Dosbox window immediately terminates.

Expected behavior:
Choose option 1 -> Game starts.

Any ideas how to start troubleshooting this?

When I say "Game was working fine", I mean I had started it many times, and had progressed in the main quest to the third island (Not in one sitting).
I tried moving the savegames, so that is not the trigger.
Post edited March 18, 2022 by AnsuGisalas
Further testing: Installed the game on another PC, but after the same Windows update... same issue occurs.
Anyone else have different results?
I've tried it myself and it seems to be working fine, on my laptop.

I tried both by downloading the Galaxy version and the offline client on Windows 10 version 21H1 build 19043.1586 (latest I can find on windows update on my PC).
I have the same problem. Looks like the problem is within the folder cloud_saves. Some incompatible setting gets synched from the cloud. Do the following steps to fix the issue:
1. Open the file dosbox_albion_single.conf within the Games\Albion folder.
2. Change the line mount C "..\cloud_saves" -t overlay to #mount C "..\cloud_saves" -t overlay and save the change. This will temporarily disable the cloud sync functionality, but after that the game can be run again.
3. Run the game once and quit it from the main menu.
4. Copy the file SETUP.INI within the Games\Albion folder to the folder Games\Albion\cloud_saves. When prompted, overwrite the existing file.
5. Open the file dosbox_albion_single.conf again and revert the change you made at step 2.
6. Run the game as usual. It should work again with cloud sync enabled.