The game had a few slight differences from the original Battle for Middle-Earth, like the controls and uninclusion of build plots, but players soon forgot the old controls and picked up on the new ones. With the addition of a new difficulty level, The Battle for Middle-Earth II also added new factions and maps, as well as a system to create your own heroes in the PC versions. A new Evil Faction was added in the Form of Goblins and many of the units and Heroes in for the Good factions in the first game joined together to become one big faction. 2 new Good factions were therfore introduced: Elves and Dwarves. This time, the Campaign (which still contains a Good Campaign and an Evil Campaign) took place in the North to explain what happened during the films.
The factions included in The Battle for Middle-Earth II are:
The Good Campaign opens after the Fellowship of the Ring has set out on their mission to unmake the One Ring of Power, with Elrond and Glóin planning the War in the North. The Elven hero Glorfindel discovers an impending attack on the Elven sanctuary of Rivendell and leads his remaining Elven armies to alert Elrond. Thanks to his early warning, Elrond's forces in Rivendell manage to repel the Goblins' attacks despite the arrival of a fire-breathing Wyrm. Following the battle, Elrond realizes that the Elves and Dwarves must join forces to defeat Sauron and his allies.
Elrond sends Glorfindel and Gloin to ally with the Dwarves. Unfortunately, the High Pass is infested with Goblins, which have posed a major threat to this area. The Elves decide to clear the Pass of the Goblins, rescue an ambushed Haldir, and eliminate the Goblin settlements.
The next battle takes place in the Goblin capital of Ettenmoors. Glorfindel, Gloin, and Haldir rush to rescue an Elven settlement from Goblin attacks. After rescuing the settlement, they lead an Elven army to destroy an ancient drum, free an Ent Moot, and destroy the Goblin King and his fortress with the help of the Ents. After their victory, the heroes are informed that the Goblins, on Sauron's command, have enlisted the service of Drogoth the Dragon Lord who is laying waste to the Dwarves of the Blue Mountains. The heroes make their way to the Blue Mountains and help the Dwarven army to defeat Drogoth and his Goblins. Unfortunately, the Dwarves refuse to help them and the leaders of the Free Peoples are forced to move to the Grey Havens to seek help from the Elves.
The Grey Havens, an Elven port on the western shores, is attacked by the Corsairs of Umbar, allies of Sauron. The Elven ships, with the help of Glorfindel and Gloin, eliminate the Corsair blockade and capture Mordor's shipwrights. Soon after, the Corsair and Goblin armada prepare their assault on the shores. The Dwarves, who have been reluctant to ally with the Elves, eventually decide to come to the aid of the Grey Havens. With the Dwarves' help, the entire armada is destroyed.
This signals the end of any major Goblin threats in all of northern Middle-earth, which is all very well because Mordor is now preparing to attack.
Sauron decides to prepare his northern Mordor armies for war. The Dwarven king Dáin leads a small group of Dwarves and men to defend Esgaroth, where they lead an assault upon the Mordor fortress on the opposite shoreline. Dain defeats the Mordor army, but they are forced back to Erebor. Dain and his mighty Dwarven armies prepare mighty fortresses outside Dain and prepare their armies and withstand huge waves of Mordor forces. A group of Goblins and Cave Trolls from Mt.Gundabad help the Mordor host to lay siege to the Erebor. Dwarves manage as well as they can on their own despite sneak attacks to seemingly vulnerable entrances, but Elven reinforcements from Mirkwood led by the Elven king Thranduil cement victory for the Dwarves. During the latter stage, the Mouth of Sauron attempts to lead a sneak attack force into Erebor, but a few Phalanx units and Men of Dale in the area, spring into action and defeat the siege party.
To permanently destroy the Evil in the North, the combined Dwarven-Elven armies prepare to attack Dol Guldur, Sauron's main fortress in the North. Elrond leads the first attack, but later, Thranduil, Glorfindel, Glóin, Arwen, and King Dáin all unite under the Dwarven-Elven alliance, aided by the Ents and Eagles. Mordor, to counter the threat, attempt a counterattack from the forest and summon various creatures, including a Watcher, a Dragon, and even the Balrog. Despite these powerful comebacks, the Good forces and its three combined armies overcome the defenses. Using various ancient Elven and Dwarven powers (including horse floods, earthquakes, and sunflares), the army of the Free Peoples destroy the fortress, eliminating the last threat in the North.
The Evil Campaign follows an alternate version of the War in the North. Sauron sends the Mouth of Sauron and the Nazgûl to the North to muster wild Goblins. His lieutenants lead the Goblin army and launch an assault on the Elven forest of Lórien. Despite heavy resistance, the forest is overrun, with Celeborn slain and Galadriel having fled to Rivendell; even Caras Galadhon collapses under the might of the massive invasion. The Mouth peers eagerly into the captured Mirror of Galadriel for his next attack, as his Goblins celebrate their triumph over the Elves amidst the ruins of the once-mighty stronghold. Another group of Goblins, led by the Goblin King, attacks the Grey Havens by land and sea. The Elven port is destroyed, and the march across Eriador begins; Hobbits of the Shire are chosen as the next target. The Goblin King's horde manages to crush the Hobbits and burn their country to the ground, but Wormtongue, one of Saruman's henchmen, suddenly appears with a large army of Isengard Uruks and claims the land for his master. The Goblins annihilate the well-trained army and kill Wormtongue.
The Goblin King continues marching and besieges Fornost, the fortified ruins of the ancient capitol of Arnor. The defenders, consisting of the Dúnedain and Dwarves, mount a heavy defense and even attempt to use a machine of destruction, the Earth Hammer. Nevertheless, they crumble under the relentless Goblin attacks, and Eriador falls under Goblin (and indirectly, Sauron's) control.
Meanwhile, Sauron launches a concurrent campaign east of the Misty Mountains. The forces of Mordor, led once again by the Mouth of Sauron, march from Dol Guldur to eliminate the Elves and the Ents that guard the Forest Road in Mirkwood. Three of the Nazgûl (likely the same ones that attacked Lothlorien) and even Shelob also lead the Mordor army, consisting of Orcs, Trolls, and Corsairs. While claiming the Forest Road, they destroy the Elven stronghold in the woods and defeat the Elf King Thranduil, clearing the large majority of the Elves in the North.
Afterwards, Mordor brings the war to the Dwarves, led by King Dain. The Mouth of Sauron, the Nazgul, and an army of Mordor advance through the Withered Heath, destroying many Dwarven settlements and releasing young dragons (Fire Drakes ) to aid them. After all the Drakes are free and the settlements destroyed, they move on to recruit Drogoth the Dragon Lord.
In one of the most important battles in the North, the Mordor army lays siege to Dale and Erebor. Sauron's initial army attacks various Dale buildings and take the treasure in them. Later on, the Mouth of Sauron and two Nazgul arrive, set up a permanent base, and begin an organized attack on Erebor. Many Dwarven warriors periodically attempt to stop them, but they are all eliminated one by one. Gloin and some other Dwarves attempt to attack the base from behind but they too are slain. After full preparation, the Mouth of Sauron leads the armies of Mordor to the heart of Erebor. King Dain and his Royal Guard attempt to stop them, but they are slain under the relentless hordes. The army proceeds to destroy the Throne of Erebor and gain total victory.
For the final battle, the Goblin horde and Sauron's forces from Mordor converge at Rivendell, the last surviving stronghold against Sauron in Middle-earth. Eagles, the Army of the Dead and the remnants of the Fellowship of the Ring arrive to help Arwen and Elrond, but Sauron (having attained full power through recovering the One Ring from the dead Frodo) and all his gathered forces enter the battle and completely destroy the remaining Good forces in the North.