This generally happens because your video card does not properly support Shader Model 2.0. SM2 is required to be fully supported in order for Conan to launch. You will receive this error with very old nVidia/ATI cards. Your card may not be supported due to this. If it is and you are at the lower end of the system requirements, please do the following:
1. Start the game. When you hear the music starting, a prefs file has been written and you can edit it (in Notepad for example).
2. To find this, you must go to control panel -> folder options -> view -> turn on see hidden files and folders.
3. It is found at the following location on your PC
VISTA: C:\Users\[user name]\AppData\Local\Funcom\Conan\Prefs\prefs_2.xml
XP: C:\Documents and Settings\UserNameLocal Settings\Application Data\Funcom\Conan
4. Edit the line called < Value name="RenderSetting_ShaderModel" value="1" />
5. It should read <Value name="RenderSetting_ShaderModel" value="0" /> (NOTE: NO spaces between "<" and "Value").
6. Launch Age of Conan.
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