They are completely redoing the game. Its sounds like the characters, plot, and locations will make a return. The gameplay mechanics will be different in some way, and if they are charging the battle system you can be almost sure they will adjust the leveling system.
I can see them using a sphere grid system for leveling, but I think Materia will still be the main way to upgrade spells, skills, and summons. I always thought there was a lot more they could have done with Materia so hopefully they can expand on it.
psn- tokila
add me, the more the merrier.







