I understand the rules state you need two core sets to play with three/four people however the only thing I can see (at first glance) you would need is more threat counters which you can keep count with anything.

Has anyone else managed to conduct a three/four player game with just one core set or am I missing something major here?

Thanks

I have played 4 player with just the core set, we just each play 1 of the colors and give 3 gandalf to leadership b/c sneak attack.

However - you are playing with a significantly smaller deck than you should. A smaller deck can make the game easier as you draw your cards more reliably from a thinner pool, although the core set does have some 1 off cards that are a pain to only have 1 of such as unexpected courage.

The 4 "starter" decks in the core set aren't very powerful to begin with, so playing with a smaller deck won't make the game significantly easier... don't worry, it'll still be plenty hard