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Hi guys. So... I was looking in the web for some info on how NG+ works and I've read that equipment, potions and other things carry over. Thing is, I've done most of first playthrough using Cat and Wolf Witcher sets, which were really good stuff in NG, (even in Blood and Wine where you find some enemies close to level 50).

But I've read that gear quickly becomes obsolete in NG+, so question is: does that mean that I'll quickly have to get rid of Witcher equipment sets and start buying/using high level generic knight equipment? Or is still NG+ doable with level 40 Witcher Great master gear?
Yes, it doable.

It offer you less base protection but the bonus buff of the grandmaster armour are worth it in my opinion.
Not everything gets carried over. Your Witcher gear, which you will have to find again, gets upgraded to Grandmaster in NG+ .
IIRC, I stuck with my old gear as long as possible, simply because it looked so good as a set :-D. But I was also keen to find the NG+ Witcher armor sets (the 'legendary' ones). I don't remember having ever bought stock armour in NG+. It's loot or recipes. Early on there's the possibility to get the 'legendary' Viper School (light) armour.

( BTW, the master armour you get from the Skellige smith at Crow's Perch gets leveled up to ... phew ... pretty high, and when you finally reach that level, it has become useless. )
Both quests and equipment get scaled in NG+ depending upon your starting level. For example, whereas in the normal campaign the basic Feline armor might be level 14 (13 levels above your starting level) the equivalent "legendary" Feline armor you can get in NG+ will be your base level + 13. So if you start NG+ at level 50, say, the Legendary Feline Armor will be level 63, with an armor rating scaled to that level. This scaling applies only to gear you find/craft in NG+, not anything you bring into the game.

That is the reason your endgame gear in the normal campaign will quickly grow obsolete from an armor/damage perspective. However, the only equipment effects that scale are armor rating and damage output (for swords). Critical effects, such as chance to stun or poison, do not. So if you have a sword with useful critical effects, particularly a runecrafted one, then you may be better off sticking with it rather than swapping it with the first higher level longsword you find.

I recommend sticking with your ending equipment until you are able to craft the various tiers of legendary witcher gear, then make the switch.

Note too that the game's level cap is 100, so you will never find any quests or equipment above that level regardless of how high a level you begin NG+ at. Monsters, on the other hand, can exceed that level.
Gaps between levels of usage, seem larger in NG+, as opposed to NG. This makes somethings, looted items, oddball craft items, more desirable, to fill in where the witcher gear lapses. I use Ursine weapons and Feline armor, and 9 red skills, 3 blue(shield) skills. Skills give a bunch of atk power, while wpns boost crit damage. Ive found adrenaline point generation shards on wpns slots to be useless overkill. Instead, I go for slotting armor reduction shards, in order to hit harder and gen adrenaline. Not simply improve adr. Take care
Ah, I didn't know you get to re-craft upscaled versions of the Witcher armor sets in NG+, that sounds much better. I was affraid that the game just removed equipment quests in NG+ or something like that.

Thanks a lot for the replies.