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Do I need both the Malifaux Rule Book and Malifaux Rules Manual to play? Is the manual just some sort of rules compendium?

The Rules Manual is what you'll want to get if you are just starting out, it has the most updated rules.

The Rule Book has fluff and model stats included, but a lot of the info has undergone errata.

They are all cool books though, so I would suggest getting everything if you end up liking the game and have money available. Pick up the Rules Manual, then Rising Powers, followed by the Rules Book

Cool beans... I'll have to check my LGS if they have any of those.

You only need the Rules Manual to play.

However I would still recommend the first book as it has alot of great fluff and all of the stats for the first wave models.

Yeah... I'll definitely get both... fluff and stats are always fun.

I would say that the pair of larger books are not essential, but learning the fluff and researching model stats and thus the metagame hinges on them. If there was a proper fan/wyrd created wiki that answer would change.