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Has been fixed by dedicating more memory to the virtual machine. Through testing, graphics error and subsequent game crash was triggered either by...
Adding to my text, tried installing Parallels 17 and game still crashed with Critical Graphics Error at the same place. Please please please fix...
Running on M1 Max and Parallels 18.1.0. Exact same playing out of issue as described by TV4FUN. Playing Atomic Heart and at start of chapter cut...