The character progression system in The Elder Scrolls Online is built off of the same system that is present in the single-player Elder Scrolls games such as Skyrim and Oblivion. When characters level up, they can spend a point on either Health, Stamina or Magicka attributes as well as spend a point towards a skill.
The individual skills are where things diverge a bit as they are based on a character's race and class. The character's race determines a set of abilities while the class grants three unique skill lines in addition to the general skill lines available to all characters such as the weapon and armor skills. Additional skill lines can be be opened up by joining the Mage or Fighter Guilds as well as by figuring out how to become a Vampire or Werewolf.
Naturally, experience can be earned by exploring the world, taking on quests and battling monsters to level up and earn points.
The points can be spent on specific abilities and spells from specific skill lines. As points are placed towards specific skills, this will unlock additional skills in that line. Additionally, skills can "morph" once a certain level is attained. The example used in the video is a spell that heals a nearby ally that can be morphed to heal three nearby allies or heal a nearby ally while also restoring some Magicka.
Ultimate abilities can eventually be unlocked as well once player's have advanced far enough in a skill line. These ultimates don't consume Magicka or Stamina but require the character to build up power to use them on the battlefield.
The Elder Scrolls Online is currently in beta testing for the PC but will be released for that platform plus the PS4 and Xbox One sometime in 2014.
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