Well I'm pretty sure they did specifically mention smaller battle arenas that were separate from the large scale instances, although I can't remember which interview it might have been. They said it would allow people the chance to get more traditional DM-style gameplay out of it if they wish. What they didn't specify was whether it would be focused on just giving people a way to practice their skills, or if there would be some sort of ladder-ish type system, or if you could bet on fights or even if it'll be strictly intra-racial or not.
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