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Same with SMGs. Weapons that only deal damage in melee range are not viable, at all. Shock Troops are an exception because they're "armored".
Dane is right when he says there's no incentive to bring out SMGs and that the game is dominated by rifles, assault rifles, and LMGs, because when your weapon does nothing until you get in melee, even flanking does nothing, because a rifle unit can just turn and fire at your flanking SMG unit and kill it before it gets into range to deal any damage.
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This is true for some SMG units, but some of them have the necessary tools and deal enough dps to make it worth using them:
- Revamp stormtroopers: very strong cloak + smoke nade
- Commando's: very strong cloak + smoke nade (or super nade)
- Shocktroopers: high survivability + smoke nade
Then there are the weaker SMG units that scale much worse and have weaker tools, which makes the trouble of using them not really worth it:
- Assgrens/feuerstorm volks/arty officer: MP40's have low dps and aren't good on the move.
- PPSH conscripts: Only get three PPSH's with low total dps. Although conscripts don't scale that well anyway and once they've closed in they can use hit the dirt which makes them 50% harder to hit.
- Assault engineers: Good dps with 5 men, but no tools to close in on the enemy.
Squads with more of an assault rifle profile, like rangers and panzergrenadiers, don't get these luxuries, but instead get stronger midrange damage. This makes them useful at a distance from the enemy, but also makes it harder for them to close in to deal their maximum dps.
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The problem with close range combat in CoH2 is:
1. Long range units are easier to use.
2. Close range units will be focused fired on by the enemy while closing in / when closed in.
3. Close range units will be shot at for longer when retreating.
This doesn't mean close range squads are useless, it just means you shouldn't compose your core army around it. A good flank with a strong close range units can absolutely devastate your opponent because he often has no way to deal with the massive dps once they've closed in.
Keep these tips in mind:
1. Don't use them on their own; make sure the enemy is occupied with something else. (Less important when you have cloak or the enemy squad is on its own).
2. Close in when the enemy has low hp or target the retreat path when your enemy has something like a bar blob or something else that has strong close range dps.
3. Be creative at which angle you come in.