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Quote: "Just wondering if Lua was chosen for a specific reason over C# as it's scripting language?"
Lua was chosen because its syntax is somewhat similar to the BASIC programming language that the lead developer liked for its simplicity and nostalgic reasons.
Also originally GameGuru was built on the DarkBasic Pro codebase and it had a Lua plugin already and required no effort to implement it.
Quote: "Would it be a huge undertaking and possible breaking the engine if the team switched to C#?"
Yes, it would require a lot of effort to add C# support but C# does not offer any benefits really. C# become popular only because of Unity and .NET but otherwise Lua is superior in every way. Lua is a very fast, simple yet very powerful and capable programming language.