The game is very similar to its predecessor in terms of gameplay. It is primarily set in 3D battle arenas modeled after notable locations in the Dragon Ball universe, with the central hub being an expanded version of Toki-Toki City, known as Conton City. As reported by the creators of the game, Conton City is seven times larger than Toki-Toki City.[7] Players are able to freely traverse the hub world, and in some areas are capable of flying, once they have unlocked the ability to fly. Players are also able to travel to other locations such as the Namekian Village and Frieza's ship. As in the previous games, some skills have to be learned through masters and other non-player characters, some of whom are found exclusively in those additional areas. Xenoverse 2 is the fourth Dragon Ball video game to feature character customization, and allows players to choose from five races: Humans, Saiyans, Majins, Namekians and Frieza's race, each with different strengths and weaknesses.
The game also features race-specific quests, minigames, and transformations (the latter of which was available only to Saiyans in the first game via the Super Saiyan forms). Players also have a much greater role in the story, as their choices can affect how the story unfolds. Multiplayer servers hold up to 3,000 players at once. The game also has a training mode called Training School. The player can use different kinds of ki blasts (Power, Homing, Rush, Paralyze and Bomb), and the ki blast type depends on the player's race or Super Soul. Additionally, players are able to transfer their save data from Dragon Ball Xenoverse. This results in a projection of the player's custom character from the previous game appearing as Toki Toki City's "Hero" in the middle of the square. Players may also select a premade avatar to serve as the "Hero" if they do not transfer save data.