Might not be the exact halfway point of the game, but marks the middle of the story
Volcanic well
The Captain approaches the well at the top of the wizard city mountain. Somehow - either by accident or by being pulled in by an evil force - he falls into the well, down to the evil energy pit below where The Sea Devil is stuck.
The player approaches the well to check it out. Once you get close, the captain’s hand reaches out and he climbs out of the well. He seems perfectly fine - stopping for a moment to dust himself off and look at his hands. Out of nowhere, he tells the player to fight him.
The fight is pretty monotonous: The captain approaches you slowly before winding up punches, only to lose his balance and fall over. He’s no threat until his final sliver of health, where he grabs you and hits you with a jawbreaker - it lands with a HUGE impact and puts you out of the fight entirely.
The captain has been taken over by the sea devil, who is using him as a powerful host body. He seems a little surprised he crippled you with his punch. It isn’t clear at this point to the player what’s happened to the captain.
Evil fish energy wave
After your fight, the sea devil unleashes a massive wave of energy that explodes out of the captain, traveling across the entire island.
We get a bird’s eye view of different locations as the wave passes through them. When the wave hits these areas, enormous fish models appear, swimming thru the air and doing normal fishy things. They don’t seem to care about castaways, but they’re still ominous. The fish stick around throughout the rest of the game.
The fish are lowpoly 3D models and use more realistic photo textures instead of matching the cartoony style of the NPCs.
https://twitter.com/heinn_dev/status/1694483174913368195/photo/1
Knocked off a cliff
After the shockwave, the ground cracks and you lose your footing, stumbling off the edge of the mountain. You fall, with the screen cutting to black before you wake up in the Wizard shack.