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So reading through the rules on damage types and damage reduction they read as the following summary

Bludge\Peirc\Slashing yadda yadda these can have damage reduction Then it says energy - Not subject to damage reduction Then it talks about Precision damage as a whole new category specifically saying(note the part in bold):

Precision Damage: Precision damage is a special type of damage, which might more appropriately be called a "category" of damage because any of the other damage types listed here might also be considered "precision" damage under the right circumstances. Precision damage is usually dealt by classes like the rogue when he is able to catch an opponent unable to fully protect itself. Precision damage assumes that the target has a somewhat normal anatomy or at least has a physical form which might have weak spots which could be detected or taken advantage of. Previous editions of the game (prior to the Pathfinder Roleplaying Game) limited what sorts of creatures are vulnerable to precision damage more than the Pathfinder Roleplaying Game does. This was a deliberate change to make a key class feature of classes like the rogue more frequently usable. Attacks which affect areas (such as splash weapons) usually do not deal precision damage.

Are they implying that a sneak attack is not subject to damage reduction because its a new category all to itself? If not that, then what are they saying? Whats the point of calling it a new category if it doesn't have new rules?

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No, damage reduction still applies

What they are referring to is the fact that precision damage now affects constructs, plants, and undead creatures now; in 3.5 those types were immune. In Pathfinder, only elementals and oozes are immune to precision damage.

Precision damage is of the same type as the attack to which it is applied. The only exception to this that I am aware of is attacks that deal ability damage or drain, or energy drain. In 3.5, precision damage that triggered on such attacks was dealt as Negative Energy damage. I don’t know if Pathfinder has explicitly addressed that case, but for sanity’s sake I strongly recommend all DM’s use that rule or something like it.

For the sake of citation, the rules say the following:

The rogue's attack deals extra damage anytime

That is, Sneak Attack provides a bonus to your damage roll. As a bonus to a roll, it’s just a number that gets added on to your overall damage. It does not change the attack’s damage type, it simply increases the amount of damage of that type that you do. The term “precision damage” is not a damage type, like “slashing damage,” but rather a category that certain sorts of damage bonuses go in. In this manner, it is similar to non-lethal damage.

Note: The statement that Sneak Attack may be used more frequently is perhaps misleading

That’s not really the effect that Pathfinder’s changes had: they allow Sneak Attack to be used more broadly, but there are a number of changes in Pathfinder that make it much more difficult to accomplish multiple Sneak Attacks in one round. Unfortunately, the rogue needs to do so if he is to pose much combat threat, so this is a serious problem.

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