According to the developers, Nautilus, the basic battle system is pretty much the same as the previous installment, but they've added some new combos. "In a way it's more simple and toned down so it's easier to understand," they said, but they have also worked on making it more strategy oriented. In Shadow Hearts: Covenant, in order to execute a combo, the characters had to line up, which was slightly confusing or tedious, particularly as enemies could knock you out of place.
This is gone for From the New World; as long as you have your "stock" you can execute a combo -- you can stock up two stocks, from attacking or getting attacked. Otherwise, the combo system doesn't really change from SHC, but they have added a "double" option. In one turn you can do two different kinds of attacks. For example, the first could be a normal attack, while the second might be a special ability attack. A double combo can link next character into your combo. The enemies have this ability as well.
In fact, the enemies have all of the same gameplay rules and system as the characters have. The part that they want to target in terms of strategy is to make the player watch out where the enemy stock gauge is at and to defeat them before it fills up. This becomes especially relevant with boss battles, as you will have to use this strategy to execute the right moves and depending on how well you do you may even be defeated or win easily. Hard hits decrease the enemy's stock gauge.
As mentioned, the lead of Shadow Hearts and its sequel, Yuri, isn't the star. The lead character is Johnny, a 16 year old with amnesia, while Shania, the female lead, is the demon fusion character (as Yuri was.) There developers have promised changes and adjustments but also promise that From the New World maintains the ways of the SH series, such as the humor of the original games. Shania is a Native American character, and questions came up about her portrayal. According to the developers, they did not ignore that and are aware of how Native Americans should be shown. They knew that we wanted to use Shania as a Native American character, so they have treated her in a way people would accept... essentially, they did their homework on this topic.
The location, of course, shifts to the U.S. in 1929, a big change from the Asian and European locales of the previous games. The developers mentioned that they hadn't used North America in SH previously, but had always wanted to incorporate America into the game -- it was always as a concept or vision for the series. With FTNW they knew they would use new characters and story, so they decided to shift the setting as well. 1929 is during the Great Depression; there is a lot of history used, but they don't go overboard, and do mix in fantastical elements. More important to them than perfect historical accuracy is taking Johnny and putting him into that time. They aren't going to match everything ... you will see Las Vegas and Roswell, both of which are anachronistic. They envision what should, could, or would happen in SH universe at these locations. The story they envision is Johnny's story, at that time, as an SH main character.