Loki is a low ranking god born from a union between the Aesir Gods and their enemies, the Vanir Gods. Because of this, both the Aseir and Venir distrust and disfavor him. While under the control of Odin, he disguised himself in order to hide his true feelings; the harmful acts which the gods did to him are too serious to be forgiven. During "Ending A", Loki steals the Dragon Orb from Valhalla and with its power, he able to transform and increase his strength immensely. With his new power Loki easily kills Lucian. Later on, he gets his revenge by kills both Surt, King of the Vanir and Odin, king of the Aesir. Ironic, is it not? If Odin hadn't stolen the Dragon Orb from Midgard, all of these events never would have never taken place.
The god Loki doesn't have a major role until the second have of the game, this being when Lucian is sent to Valhalla after his death. Soon after his arrival, Lucian is tricked by Loki into using the "Water Mirror" to speak with Lenneth. This gives Loki the time needed to steal the "Dragon Orb", and using its power, kills Lucian. He then goes to Surt, king of the Vanir to offer him not only the "Dragon Orb", but the dragon Bloodbane and the wolf Fenrar. Surt refuses his offer, saying that he has not fallen so slow as to raise arms with filthy beasts and demons. Loki goes into a rage and transforms! And after an unseen battle, sends Surt to the "Plane of Nonexistence". Loki now travels to Asgard and insures that it is utterly destroyed. Soon after, Odin confronts Loki and after a brief conversation Freya appears. She tells Loki that he has gone too far, asking if he thinks he will truly be forgiven? Loki replies; "Perhaps not". At this point Freya prepares to attack, but Odin calls her off. Insted challenging Loki himself. In a flash of light both Loki and Odin clash in battle. But unfortunately, Odin is bested while trying to protect Freya.
Lenneth arrives to find Freya crying over Odin's body. After a short conversation with Freya, Lenneth goes to find Loki at the summit of Asgard Hill. Lenneth is hopelessly outmatched, but Loki's act of killing Odin and Lucian causes her to transform. Giving her the not only the "Power of Creation" but the power to defeat Loki as well. After the battle, Lenneth is shown taking Loki's soul into herself.