My game will be a live service gacha game where I will add in more characters for players to use as time goes on so it will definitely go past the 10 characters recommended limit. Each character is only unlockable once and cannot exist as copies in a player's inventory. They all have statistics such as level and can equip items. Should I still use the character system or some other method with durable items?
If it's the latter, how should I go about equipping items for each character?
Character feature of PlayFab is not designed for your scenario, it is a substitute of a player account. Instead, you may create items in catalog and maintain them as different “characters”. If the “characters” have any customized data, you can define them in Custom Data field.
When an item has been granted to a player, it becomes an instance in player’s inventory. You can add more customized data in Custom Inventory Instance Data field as a modifier such as level and equipment attributes. Custom Data in Catalog is separate from the one in Inventory. The corresponding API is Server.UpdateUserInventoryItemCustomData. To be clear, this is a server API, you should call it in Cloud Script/Azure Function (CSAF).
About Custom Data, please refer to https://community.playfab.com/questions/13923/custom-data-per-inventory-item.html
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