[TheDemon]

The problem with atlantis's units is the low protection and low defense means they soak more hits, which means they hit the "heavy losses" morale check far more often than a unit for Oceania. They're pretty bad troops to be facing down a lance charge + multiple attacks opponent. At the same time, their MR maxes out at 10, and can be as low as 7, which is devestating against R'lyeh. Basically, Atlantis doesn't have the army tools to combat either enemy nation in either age.

In terms of mage tools, you have destruction/earth meld in EA, which will take care of a careless Oceania player, provided you get at least one year to research Alt 4. You have nothing in your arsenal against R'lyeh. In MA, you have Body Ethereal for your lobsters, but your earth mages are 1/4 and don't come in time in enough #s against Ichycentaur spam. In other words, you're relying on luck against Oceania. Against R'lyeh, your MR options are limited to Ench 4 for Antimagic, and even then you don't have any high-morale chaff.

Assuming the underwater war is still in contention after year 1 is pretty naive. To me this means you need a mage solution to your army problems within one 4-level path. MA has a few options for both potential targets, EA has an iffy option against Oceania and no options against R'lyeh. Neither age is terrible, but its an uphill battle in both.