WEll I'll be the first to admit that the game ending was pretty vague and bad. It seems that the developers/story plot writers got lazy or something? '
This is what I understand from the storyline and the ending.
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OK I WARNED YOU.
Save her
If you let her live Lucifer consumes her soul. It seems that Lucifer will destroy the world and Edward would be the only person left. (loneliness) End of humanity. Then "the key" just lets Edward walk away (wth?) Edward just walks away without even attempting to kill Lucifer (who is now Sarah).
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Kill her
If you kill her then Lucifer will consume Edwards soul/body and force "the key" into the portal (hell). "They key" screams "man will stand against you" and Lucifer replays "did you think I'd come alone". At that point the game ends and credit runs. It could be a hint at a sequal, but no one knows. Perhaps there is another person or group of men that will try to kill Lucifer (who now is Edward Carnby)\
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Both ending are lame and indicates there was no way to stop Lucifer's reincarnation. Which is wierd because Sarah actually grabbed the stone from Edward, which means that Edward should've never been consumed by Lucifer. that part confuses me a lot.