So on my server we've tried breeding the Elder Valkyries and Cryos, and both have give to babies that are around a quarter of the levels of the parents. We have Difficulty 10 set, so elders as high as 1500. So our tames are around levels 900-2200. And whenever we breed them the babies end up being between 200-350.
Is anyone else getting this problem? And is there a way to fix the issue?