Xenoblade Chronicles X has many similar gameplay mechanics to Xenoblade Chronicles, such as the freedom to explore the world, the ability to run to virtually anywhere you can see in the distance, and the return of an Arts battle system which involves both auto-attacks and a cooldown timer for each Art. The game also introduces mechs under the title of Skells which can both be used in combat and for travel/exploration. They appear to have a limited amount of fuel based on early footage.

Rather than following a preset group of characters such as in Xenoblade Chronicles, this successor introduces the ability to customize your own character and name them at the beginning of the game. Collectables are scattered throughout the game world, some acting as quest items, and enemies drop armour and weapons that characters can equip. The character can jump over obstacles. It was shown that there is no fall damage in this game in the Nintendo Treehouse stream.

Battle involves real time combat in which guns for long range attacks can be switched for knives to attack up close, and this can be done immediately and as frequently as necessary. The character will attack automatically when in range, but Battle Arts, which have a cooldown time after being used and are more powerful attacks or have special abilities, are used. There is also a Soul Voice ability, similar to Xenoblade Chronicles Affinity boosts, grants characters bonuses such as a health boost if successful. There is no other way to heal a party ally; a character must use their own abilities to heal themselves. A TP system is also involved in which an art requires an amount of TP, and this is presumably gained from auto-attacks or simply waiting. If a character runs out of HP an ally can revive them within 30 seconds if enough TP is stored, or the player can choose to restart from a nearby checkpoint immediately.

The Monolith Soft Japanese Trailer released on February 6, 2015, revealed a four-player online game mode for some special quests, and up to 32 players for online communication (in-game chat), item trading and information sharing functionalities.