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Arcanum begins with the player creating his or her character, choosing from a large variety of races, attributes, technological skills, magical aptitudes, and background traits, or the player may choose a predefined character.

Over the course of the game, the character may improve his or her skills by gaining experience through completing quests or defeating opponents in combat.

Every time the player gains a level, he can spend one character point to improve any attribute, weapon skill, technological discipline, school of magic, thievery skill, or social skill.

Every fifth level, one additional character point is awarded for a total of 64 character points.

The player can only control one character directly but may recruit additional followers during the game depending on his or her aptitudes and alignment.