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The Loser wild flare lets the player declare that both sides lose the encounter. The actual text is:

As a main player, before encounter cards are selected, you may declare that both sides lose, sending all involved ships to the warp.

I am not clear on how exactly to resolve this. The loser flare must be played before encounter cards are played, but it doesn't explicitly state that encounter cards don't get played even though the outcome is already determined. Should the main players still play their encounter cards? This could matter for example for the Oracle super flare:

As a main player, you may end an encounter after your opponent reveals his or her card. Your opponent takes back his or her card, all ships in the gate return to colonies, and play continues as if a deal had been made.

or perhaps for the Vacuum wild flare:

For each main player other than you who reveals an attack card, you may retrieve one ship from the warp.

and the Chosen super flare:

You may keep any non-encounter cards drawn from the deck while drawing for divine intervention.

If cards don't get played, is there still a Reveal phase? I haven't read every card in detail so it's possible that this actually doesn't matter, but I would still like to know.

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One of the main things to remember here is that you "play" your encounter card face down, and then reveal it after both main players have done so. For reference, the rules for this phase are the following:

  1. Play Encounter Cards: After alliances have been formed, the offensive player and the defensive player each choose an Encounter card (Attack or Negotiate) from their respective hands and place them face down.
  2. Reveal Encounter Cards: Encounter cards are turned face up simultaneously. Or as close to simultaneously as possible in this imperfect universe.
  3. Determine Outcome: There are three different outcomes to an encounter, depending on what type of Encounter card (Attack or Negotiate) is played by each player. After Encounter cards are revealed, the encounter is resolved. Then Encounter cards are discarded. Details of encounter resolution are shown below:

The Loser Flare needs to be played before any player even selects encounter cards, as emphasized below.

As a main player, before encounter cards are selected, you may declare that both sides lose, sending all involved ships to the warp.

This would move the turn to the Determine Outcome phase since the outcome has been determined already (i.e.: both players lost, sending all ships to the warp). Since no cards are selected, no cards are played so no cards can be revealed.

Should the main players still play their encounter cards?

No. It specifically says that you must play it before encounter cards are selected. This creates an outcome so there is no outcome to be determined by playing encounter cards.

If cards don't get played, is there still a Reveal phase?

Again, no. If there are no cards selected and then played face down, there is nothing to reveal. An outcome has already been determined.

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This is the answer I was leaning toward before asking here, but your answer doesn't convince me. You state It specifically says that you must play it before encounter cards are selected. but to me that doesn't really say that encounter cards aren't selected. Also, I play MTG where the phases of the turn all happen even if there is nothing to do. For example the 'Combat Damage' phase still happens even if no creatures were attacking. I didn't see anything in the rules that says phases can be skipped if they aren't needed. –  Matt Jan 10 '13 at 19:36
    
I think you may have misunderstood part of my question. When I listed the Oracle, Vacuum, and Chosen Flares, they were examples of things you do on the reveal phase where it could matter a lot if encounter cards are still played after the Loser wild flare has been played. –  Matt Jan 10 '13 at 19:40
    
I get that it's easy to compare games to Magic because it's something you know. I struggled for awhile trying to learn Vs. because I was comparing it to Magic. I think ultimately there is a huge difference between a game as complex as Magic and something as simple as CE. You may not skip phases in Magic, but there was no reason for the creators of CE to address this in their rules because it's not an overly complex game (and there aren't money tournaments). Ultimately, play it so that you have fun. My take is that there is no need to go into those phases because an outcome already happened. –  SocioMatt Jan 10 '13 at 20:15
    
I agree that your interpretation of the rules is probably correct. I just don't like when people assume things like this (skipping phases) when I can fairly easily come up with examples of where it would matter. Ill probably accept this answer after a few more days if no one else answers with opposing views. –  Matt Jan 10 '13 at 20:20
    
The neat thing about board games like this is you can always claim house rules. As long as your house rules are consistent and you can't find strong evidence that phases still happen, who cares? If that's how you want to play, make it so players have to move through phases. –  SocioMatt Jan 10 '13 at 20:27

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