Crysis Warhead updates and refines the gameplay of the original game through a side-plot parallel to that of the original Crysis game. The story follows Sergeant Michael "Psycho" Sykes, an ally of Crysis protagonist Nomad, as he faces his own trials and challenges on the other side of the island during the time period of the first game. It features new fully customizable weapons, vehicles and enemies, along with new multiplayer content. It also showcases a new, enhanced and optimized version of CryEngine 2 and is the first game developed by Crytek's Budapest studio. Psycho's arsenal of futuristic weapons builds on those showcased in Crysis, with the introduction of Mini-SMGs which can be dual-wielded, a six-shot grenade launcher equipped with EMP grenades, and the destructive, short ranged Plasma Accumulator Cannon (PAX). The highly versatile Nanosuit, which confers various superhuman abilities upon its wearer, returns.
In 2020, an ancient alien spacecraft is uncovered on the North Korean-occupied Lingshan Islands, east of the Philippines. British SAS Sergeant Michael "Psycho" Sykes is a member of the Raptor Team, a squad of mostly U.S. soldiers outfitted with advanced nanotechnology. Sykes splits up with his team following a raid on a North Korean-controlled harbor. He witnesses a North Korean warship being bombarded by U.S. Navy fighter jets. Leaving the shore, he joins a Marine vehicle convoy driving through the jungle, and defends it as it is attacked by North Korean soldiers. The convoy is destroyed and the Marines fight into the night. The VTOL transport that tries to evacuate the destroyed convoy's Marines is hit by a missile and crash-lands. Psycho awakes and goes to find a better position for the surviving Marines, but gets attacked by an EMP blast from a container being lifted away by a North Korean helicopter. Psycho is later assigned a mission to pursue another North Korean container that JSOC believes contains a nuclear warhead. As the mission progresses, Psycho is reunited with friend U.S. Navy fighter pilot Sean O'Neill who was originally going to have Nomad's spot on Raptor Team. He was replaced by Nomad after failing an evaluation test. Psycho, against the wishes of Commander Emmerson, helps O'Neill after his F-35 jet is shot down, and takes him to a VTOL to escape.
Psycho fights through the jungle and coastlines against the North Korean military to track down the container and stop them from taking it. After he reaches a cargo submarine, he sees what's inside. Rather than a nuclear warhead, the container houses an alien war machine, which knocks Psycho out with an EMP blast. After he wakes up again, he is captured and tortured by the North Koreans. As the submarine submerges, the island is suddenly flash-frozen while mechanical alien "Exosuits" attack. Psycho pursues Colonel Lee Kim Sun through the frozen waters and valleys, eventually meeting up with another nanosuit team on the island, Eagle Team. Psycho and Eagle Team continue the pursuit, fighting off an enormous walking Exosuit. Eagle Team is separated from Psycho in a mine, while Psycho continues searching for the container. After reaching an underground train station, Psycho is ordered to get on the train the container is loaded on. Emerging above ground, Psycho fights off both North Korean soldiers and aliens trying to reclaim the container, while O'Neill assists him.
Psycho is ordered to destroy the container if he cannot capture it, and the train is stopped on a bridge which is rigged with explosives in case he needs to do so. Before the container can be extracted by friendly forces, Colonel Lee arrives and uses a captured U.S. Marine as a hostage to bait Psycho off the train, and Psycho loses the detonator while saving him. The Marine pleads with Psycho to drop him so Psycho can retrieve the detonator and destroy the container. Colonel Lee manages to escape with the container before the explosives can be detonated. Although Psycho survives the fall, the Marine, who was not wearing an armored nanosuit, does not. He takes out his rage on an injured nanosuited North Korean soldier he pulled off the bridge with him, and drowns him in the river. Struck with grief for not saving the life of the Marine, Psycho has an emotional breakdown, but regains his composure in order to finish his mission.
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