Is Amnesia only takes place in the castle?

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You could theoretically run through the game fairly quickly, but don't worry - unless you're absolutely immune to fear you won't do that. Instead you'll probably advance very slowly and carefully Compared to the single player campaigns of your average battlefield or call of duty you'll get a lot more hours of fun for your money - after all Amnesia only costs half as much as those games but takes longer to play through.
Also the environments are much more varied than in Black Plague, although they all take place in or under the castle.