Personally, I like the way the AI Politics is handled in Alpha Centuari/Alien Crossfire - when another faction offers their surrender to you, they continue to have an identity whether you accept them as your loyal Pact Brother, or whether you eliminate them to the Last man.
I love the idea of a conditional surrender. You could get down to some serious negotiation there.... technologies, planets, ships, and of course, reparations. Some moolah in the form of resources, which means they can't go building up their forces again until they rebuild enough production (assuming they've been running in deficit because they're the losing party).
I also think the planetary bombardment (to kill off population) should be something you have to specify deliberately from the interface, so you can strike at military targets only, and have the option to blockade the planet. This gives you some leverage in a surrender negotiation - if they fail to hand over what you want, let rip with the mass drivers
Re: New option Idea for SE4 - Surrendering
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