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I just got my butt handed to me after fighting a group of three monsters, all of which were pretty keen on beating up just one of the kids in my party. I didn't stand much of a chance after said kid was put out of commission, so I ran away, at which point the game informed me that I had been defeated.

The thing is, there didn't seem to be any adverse effect to my loss, as everything appeared just as it was before the battle. Am I missing something, or is there no downside to losing (other than my shattered pride)? Does it make a difference if you run away or are defeated completely?

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up vote 4 down vote accepted

Nope, there are no penalties for losing. (A couple of reviews seem to confirm this) I seem to remember there being a boss fight or two where you'd be heckled, but otherwise you can lose as often as you want.

The game's aimed at a younger audience, and it's fairly casual on the whole, so there not being any penalties for losing a battle is not that unusual.

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