Battles will occur directly in the world, which is why there's a cover mechanic. In the screenshot, Cloud has already been discovered by the enemy, but it's actually possible to throw a preemptive attack from cover (grenade) to avoid a full blown confrontation.
Grenades are something we had to discuss during meetings. We thought about enabling friendly fire, but ultimately decided against it, because it could make the game too hard for people who aren't used or aren't fond of FPS.
It is indeed an action game, but it won't be too violent (?) because we don't want people to stop playing. (I don't know if he's talking about on-screen violence or difficulty. Probably the later.)
Here's another screenshot with the Guardian Scorpion. As you can see it's quite extravagant. I hope people will have fun with these new battles, which include new options not previously possible, like destructible environments. This screenshot was taken ingame, with everything moving accordingly. I wanted to show a small video but was told it wasn't possible, sorry. Please note that the user interface is not final. Once it will be finalized, I think we'll be able to show the game running.
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