Your character in The Division (opens in new tab) will start off as a rookie: a freshly activated sleeper agent with the modest goal of restoring order to Manhattan after societal collapse. But with some experience in the field they'll soon grow into a spec-ops wunderkind. Ubisoft went into detail on several of the familiar ways player characters will grow in a new post to The Division's official blog (opens in new tab).
First off, The Division will have standard experience levels for both players and NPCs. As you earn experience and level up, you'll unlock new gear, skill modifications, talents, and perks. Talents are unique in that you have to fulfill a certain condition to trigger them even after you have them equipped. For example, the Precision talent gives you 25 percent extra headshot damage for 10 seconds after you score a headshot on a target that has full health. Perks are more typical "passive abilities" that grant bonuses like increased carrying capacity.
Video courtesy Ubisoft
If you want active abilities like an enemy-tagging radar pulse or a healing grenade, you'll need to complete missions to unlock new skills. Whichever skills you have equipped will be reflected in your character's gear, so you'll be able to visually ascertain what kind of a loadout fellow players are using outside of a fight.
Lastly, The Division's PvP-free-for-all Dark Zone (opens in new tab) has its own ranked progression system. Unlike your primary level, it's possible to fall back in ranks if you die too frequently within its quarantined confines. You'll want to get your rank as high as possible to access better gear and crafting recipes from certain vendors in the game. It sounds like the old Honor system in World of Warcraft, or like grinding Crucible reputation in Destiny (opens in new tab) (if getting destroyed in PvP matches could make you lose rep).
Ubisoft still plans to kick off The Division's Xbox One beta (opens in new tab) beta in December, so you'll hopefully be able to try all of this out for yourself next month.
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