I would think that the second if-then is superfluous. If you have only two teams, you might as well do this:
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Victory
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Events
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Conditions
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(Unit-type of (Triggering unit)) Equal to King
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Actions
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If (All Conditions are True) then do (Then Actions) else do (Else Actions)
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If - Conditions
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((Owner of (Triggering unit)) is in PlayerGroup1) Equal to True
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Then - Actions
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Player Group - Pick every player in PlayerGroup1 and do (Actions)
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Loop - Actions
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Game - Defeat (Picked player) with the message: Defeat!
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Else - Actions
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Player Group - Pick every player in PlayerGroup2 and do (Actions)
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Loop - Actions
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Game - Defeat (Picked player) with the message: Defeat!
Alternatively, if you wanted to use two or more teams, you can use a kinda confusing bit of math to accomplish the same task as above, without all the if-thens. Not sure how quickly this trigger would run, but for an event that is initiated so infrequently as this, it shouldn't be a problem.
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Actions
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Player Group - Pick every player in PlayerGroup[(1 + (Integer(((Real(((Player number of (Owner of (Triggering unit))) - 1))) / NumberOfPlayersPerTeam))))] and do (Actions)
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Loop - Actions
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Game - Defeat (Picked player) with the message: Defeat!
I'll do my best to explain the math. This takes the player number, subtracts 1, and then divides by the number of players in a team. This is then converted to an integer, which, when increased by 1, gives the team number.
For example, for 3-player teams, we'll denote player 2's team.
Player number (2) --> Subtract 1 =1 --> Divide by Number of Players per team (3) = 1/3 = 0.333 --> Convert to integer = 0 --> Add 1 = 1 = Team Number.
Anyway, I hope this helps you out...