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There isn't any ill effect from inbreeding in the game either, although there is in real life. At least not at present. Who knows what Ammit's creativity might come up with in the future.

The only negative effects in breeding come from crossing two horses that carry a gene that is lethal when a foal gets it from both parents. Frame (Olw) is one that can be tricky because only affects horses that also have white causing genes, so it isn't always visible in a horse's image and can only be detected by the Color Test. All of the Kit White mutations (there are 4 in the game and many more in real life) are lethal when homozygous and when combined with each other. Sabino 1 and Sabino 2 (another Kit mutation) are lethal when combined with White 1 or White 2. They can be safely mixed with White 3 and White 4. Sabino 3 is not lethal in combination with anything. Splash 2 and Splash 3 are homozygous lethal and also lethal in combination with each other. Splash 1 can be safely combined with anything.

The reason why some genes are homozygous lethal or lethal in combination with others is that they break the genes badly enough that some essential body system breaks down or fails to develop properly. Many of them cause the foal to die in utero; Frame is the cruelest, because the foal is born with an incomplete digestive system and dies shortly after birth from impaction colic. In the game, however, homozygous frame foals are reported dead at the time of breeding.