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Choices and Consequences
This page of IGN's Mass Effect: Legendary Edition guide is all about Choices and Consequences, and what you need to know about them. Choices and Consequences are one of the primary mechanics that the Mass Effect series is known for, and next to shooting, it'll be the most common action you'll be performing across the series.
How to Make Choices with the Dialogue Wheel
The Dialogue Wheel is how choices are performed in Mass Effect. Using it, you can choose Shepard's response in the conversation. There are many different layouts that options can be placed on, but the options will not be placed randomy. Instead, you can divide the wheel into quarters and figure out what an option will do in most situations.
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First, the left and right sides of the wheel of the wheel pertain to conversation advancement. Options on the right-hand side will always advance the conversation to the next stage and progress towards its conclusion. Options on the left-hand side meanwhile will be Investigative, where Shepard asks for more information on the current topic. The literally-named "Investigate" option will open up a suite of subjects Shepard can ask if there's too many to fit on the three left-hand options.
Next is the upper and lower split, which pertain to Morality. Options at the top of the Dialogue Wheel will be associated with the compassionate Paragon morality and often award Paragon Points, while options at the bottom will be associated with the angry Renegade morality and award Renegade Points. The middle will be Neutral, and will never have any rewards.
With that information in mind, you can deduce what an option will do. For example, and option on the upper-right section of the wheel will be a Paragon option that advances the conversation. Meanwhile, one on the bottom-left will ask for more information abrasively while not advancing the conversation.
This isn't a 100% reliable: context is very important, and if the Dialogue Wheel has a rather odd layout, these rules may not apply. For example, one common layout will be to have two options on the left and one on the right. Despite the rules explained above, all of these will advance the conversation. Persuasion options is another frequent example: highlighted in blue or red, these will always advance the conversation, despite always being on the left side of the Dialogue Wheel.
Especially when you're playing for the first time, it's a good idea to check what each option actually says. If it looks like an option will be neutral despite being on the bottom half, it probably is.
Our final word of advice is this: it is very, VERY rare that a decision will appear to be one thing, only for a twist to happen and it results in the opposite. You can be generally assured in 98% of instances that what you choose is what you'll get, so don't worry too much about the game pulling the rug out from under you.
The Consequences of your Actions
Choices wouldn't mean too much without consequences, which is what Mass Effect sells itself on. One of the groundbreaking accomplishments in the series is how every decision you make is recorded on your save, which can then be imported into the sequel where your actions are remembered, and then again into the third game. The consequences of these can be minor and immediate, or major and far-reaching. For example, a decision made in Mass Effect 1 will change things in Mass Effect 3... or it'll only extend to the current scene.
The hard truth is that while Mass Effect will have many chances to affect future events, 90% of the choices you make won't matter outside the scene they take place in. Choices instead exist to help roleplay a particular Morality. Is your Shepard 100% good all the time, or will they punish someone who has earned their ire? Can a Renegade Shepard turn Paragon over the course of the trilogy? It's up to you to decide where your Shepard lands and how they may bend their viewpoint over time, and why.
Once you start breaking things down and pulling away the curtain, each Mass Effect game really only has about 20-30 decisions that may impact on future events, for a total of just over 70 across the whole Trilogy. That may kill the magic, but what really matters is who Shepard is to others, how they act in each situation, and what other characters think of them.
That doesn't make these choices automatic of course: there are many hard decisions you'll have to make, such as whether to save a vital asset or concentrate on the immediate threat, whether an enraged warrior is worth putting up with or should be put down, or how to handle an old comrade who has turned on you.
And at the end of the day, if you and a friend both play the games and forge your own paths, you'll find that your situations will be different. Major characters will be dead, those who are alive may be worse-off, and a choice you thought would be beneficial only resulted in the same problem with new faces. The fun is the discovery of it.