The game is planned to feature various gameplay modes. Gameplay has Clive fighting using a combination of melee-based sword attacks and magical abilities. Jill Warrick, a former princess from the fallen Northern Territories, is Clive and Joshua's foster sister and confidant. Joshua Rosfield, Clive's younger brother, is the Dominant of the Eikon Phoenix and heir apparent to Rosaria.

Clive is the firstborn child of the Archduke of Rosaria who embarks on a quest for revenge after tragic events involving the dark Eikon Ifrit. The main cast includes Clive Rosfield, Joshua Rosfield, and Jill Warrick.

A central part of the plot are the Eikons, summoned monsters controlled by or manifesting through humans called Dominants. The world is controlled by six factions: the Grand Duchy of Rosaria, the Holy Empire of Sanbreque, the Kingdom of Waloed, the Dhalmekian Republic, the Iron Kingdom, and the Crystalline Dominion. Final Fantasy XVI is an action role-playing game set in the fantasy world of Valisthea, where the people live in peace and prosperity thanks to mountains of crystal called the Mothercrystals.

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