Battle is an arena setup. Two opponents fight till one is defeated. Arena area is large but not extreme and includes sufficient air space for aerial combat shapes and a sufficiently large enough body of water for water shapes. One design idea is to shape the arena into a giant sphere. The internal bottom half being water, the top half being air, and a platform level at midsphere level.
The shape shifting aspect is to provide access to different tactical options so as to gain advantage over the opponent. For example Grey Cube turns into a strong melee combat shape, in response Beige Cube shifts into an Aerial shape with a distance attack. Grey cube responds by dropping into water and altering to a water shape thus avoiding the attack. Beige cube chases Grey cube into the water with a new water shape only to be met with an ambush by Grey cube. This is extremely poorly written combat I might point out.
The range of shapes would encompass shapes suited to air, land and water as well hybridization of these elements. As a very rough idea each shape would have three characteristics, an attack, a defense and a shape ability unique to that shape. For example a shape that might be used akin to a squid might have an ink spray ability to literally create a fog of war scenario, a jet of water to propel itself out of range quickly and a grappling attack. The shape’s unique ability could also be a secondary attack or defense option as opposed to a completely different ability.
I would like to see as little restriction on the sheer number of shapes available outside of combat as possible. I am very much aware that interface systems really do not lend themselves very readily to smooth combat transition etc with too many choices, hence the solution being a limited range of shapes chosen for any one battle. If I could figure out a way to effectively utilize a thousand different shape permutations into an active match I would dispose of the limitation of shapes in combat. (Excepting the idea of strict match play with set rules etc again a design point for later on).
On the other hand being restricted to a defined number of shapes requires the player to sit down and extrapolate a battle plan in his/her head and add the shapes appropriate to completing that plan. I would argue 5-7 shapes as a standard count for a match and would probably think a required shape from each pure element base. Sufficient versatility in battle options without drowning the player. (Design point for later would be the increasing of number of shapes available etc).
The key point for all the shape shifting is to create a constantly evolving scenario where the player is shifting to new shapes in order to minimize the effectiveness of attacks against it whilst maximizing their own attack potential. The consistent evolution between the two combatants would bring very much a constant think on your feet situation and provide a very unique form of fluid combat.
Inspirations behind this this game idea come from a number of sources:
Mortal Kombat/Street Fighter
Mixed Martial Art combats
Pokemon
http://www.youtube.com/watch?v=vTlN-wqAzhg
Puss in Boots - the fight between him and the ogre
Harry Dresden - the fight between Listens-to-Wind and the Skinwalker