One of the mysteries of the development process of HOI games for me is the constant disregard of all naval matters. This concerns both game mechanics and AI behaviour. Considering that it's possible to play as the UK/Japan/the USA/Italy and that the WWII included some major naval action, it is strange, indeed.
Let me explain.
We can complain about some deficiencies of the land combat system and the mistakes the AI frequently makes, but generally the most important elements of land warfare in the WWII era are represented and the in-game results are usually at least satisfactory. Encirclements are decisive and armoured warfare is important. Blitzkrieg is possible and it is equally possible to stop it by careful defensive play. The AI has the basic understanding of a frontline and it tries to avoid encirclements, even if it does not always succeed. You CAN be bogged down in Russia due to supply issues and unlike in HOI2, invincible superstacks are no longer an issue in HOI3. Sure, the supply system has its quirks, division designer can produce some strange results (things like 3xLARM+1xAC formations with a CA bonus), weather hardly matters and the AI could always be better, but all in all, you have to admit that things are not so bad in the land department.
The naval side of the game is a different story. Few things are historical or even plausible here. The importance of the navy is hardly represented and many important elements of naval warfare are poorly implemented or not implemented at all. Currently fleets resemble boats drifting aimlessly in the ocean. AI fleets are an especially bad case. I don't know about you, but whenever I see an enemy fleet I get a perverse sense of satisfaction - its uselessness is really touching. The AI fleets are an especially bad case. I know that every little dip of MP, IC or fuel that the AI used on the navy could be utilised more efficiently if it invested those resources in the land or air units and that I don't need to fear the enemy's navy at all, nor do I require a sizeable navy of my own.
So, what's wrong, exactly, and what can be done to improve the situation in HOI4? I will start the discussion by focusing on two main points - unrestricted movement and convoy warfare.
1. Unrestricted movement
One of the major issues ATM is the practically unrestricted movement. As long as something is in range of your ships, it can be reached easily. Also, the AI seems to disregard the threat caused by this completely. The gameplay consequences are significant.
For example, when playing as the UK, I can simply park my fleets next to the German ports and easily destroy any enemy ship that dares to confront me. The AI has no remedy to this. In fact, it will keep throwing its units at my fleets and meet certain doom. It will rarely use its planes to offset my numerical superiority and when it does, it has a tendency to stack 8-10 units in one sea-zone, resulting in massive stacking penalties. It doesn't help that it's unrealistically hard to attack big fleets effectively by air, because all AA guns fire at once. Let's face it - if the AI does not realise the importance of air-power in naval warfare, then it will never be a challenging enemy. IRL the fighter cover was almost a natural restriction on naval movement, so even if naval vessels had the technical capability of reaching a given area, they rarely dared to venture there without air support.
Unlike IRL, there are no minefields in the coastal sea-zones, so I can move my ships freely in the enemy waters without fear that my ships will be damaged by mines. Therefore, it's possible to invade any area by sea almost effortlessly as long as it's within the range of your transports.
It's too hard to detect ships in coastal provinces. This results in too many gamey "surprise invasions" and is especially troublesome for the AI, which struggles with intercepting enemy fleets. The AI will never be able to respond properly to an enemy invasion if it does not realise that the threat is even there. Also, the in-game messaging system is poorly suited to such situations, so it's possible to miss an entire invasion entirely, especially if you are busy elsewhere or play on high speed. It should be possible to turn on pop-ups which deal strictly with amphibious invasion threat. This could easily be done if it was possible to restrict "Enemy fleet detected" pop-ups to important regions on the map, i.e. the one which the player picks manually.
Patrol and Intercept missions should be much more precise. What's the point of those missions if the fleets on patrol follow the enemy forever and fleets on intercept mission try to intercept fleets that are 1500 km away? These missions have the potential to reduce the micromanagement significantly and make the interception process much more automatic (and easier for the AI to handle), but ATM they are not very useful.
If problems like that are taken care of, then maybe we will witness a Pacific War that doesn't end after a year with a direct strike on the Japanese home islands and a total US victory.
2. Convoy warfare
Currently there are many deficiencies in the way the game handles convoys. Let's start with the obvious one - ports often lack their historical importance and historically important convoy routes are non-existent in-game. I remember a FTM Video DD which featured King (IIRC) commenting on the issue of Arctic Convoy. In fact, ATM the Soviets do not even need to care about Murmansk at all! Nor do they need to bother themselves with Vladivostok. Or Archangelsk.
The problem reaches further when we consider the fact that Lend Lease convoys are not represented at all. Again, they are not even present in the game. IRL the USA sent tons of stuff to the UK and the USSR and protection of LL convoys was one of the most important elements of the Battle of the Atlantic.
Submarines work too much like regular ships. Every HOI game has problems with them, because it is virtually impossible to represent them properly when they operate within the constraints of the system which was designed for the purpose of surface engagements. As long as this is the case, they will always be either overpowered or underpowered. I see two ways to resolve this - 1) the convoy warfare system needs to become more abstract or 2) the system needs to become more detailed. Personally, I think that the first option would be less micromanagement intensive and easier to balance. I propose a system similar to the one featured in the Pride of Nations game:
Current in-game sea zones would be grouped into "blocks" (regions) for convoy warfare purposes, e.g. Northern Atlantic, Central Atlantic or Eastern Mediterranean. It would be possible to "assign" submarines and convoy escorts to each block directly on the map. Technology, available naval bases etc. would determine how much convoy escorts/submarines can be assigned to a given region and how efficient they would be. Also, passing fleets could suffer damage from staying in regions with enemy submarine activity.
You get the idea.
IMO such system could greatly reduce the micromanagement involved in conducting convoy warfare and it would allow the devs to balance the subs easier. The player involvement would be restricted to making strategic decisions, e.g. tech development, production, assigning subs/escorts to specific regions. The player would no longer be required to constantly monitor the subs and babysit them in order to conduct an efficient convoy-hunting campaign. Everything would be done automatically or semi-automatically. Simple and effective!