Physical Damage is an offensive attribute and affects a character’s ability to inflict damage with physical attacks and skills. Characters with a higher Physical Damage attribute will inflict more damage with physical attacks and skills.
Classes like Assassins and Gladiators, who rely on physical attacks and skills to inflict damage to their targets, tend to have the most Attack, though Rangers, Chanters, and Templars also benefit from increased Attack.
A high Physical Damage attribute is important for classes that inflict both melee and ranged physical damage.
Every 100 Physical Damage increases the damage of the skill by 10% of the base value (the value with 0 Physical Damage and 100 Power).
Ex.) The base damage of Body Smash is 642. 100 Physical Damage will increase it by about 64 to a total of 706.
With 0 Physical Damage, the damage you deal with a skill will be equal to the one provided in the in-game skill tooltip.
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The damage in the skill descriptions on this website match when your Power = 100 and Physical Damage = 0.