As with other Anno games, the player starts as an unnamed country which has to colonize and expand in the game world. While the player expands, other computer controlled rivals are expanding and strengthening. As the player progresses through the game, players have access to lodge activities and troops which allow them to invade and ultimately to defeat other players.
The game is divided into five social stages: Pioneer, Settler, Citizen, Merchant, and Aristocrat. At the start of the game, all of a player's citizens are pioneers. They pay little amounts of taxes, and require only food and a town center. As a player's empire develops, so does his population. They begin upgrading (provided they have sufficient goods), paying more taxes, but also requiring more goods, such as tobacco products, perfume, lamp oil, and much more. It is crucial for a player to develop quickly, as not much profit is attained until reaching the merchant stage.
Players can trade with other opponents settling under the Queen's name, or with foreign cultures.
Liang Wu and his Chinese are found on small islands in the north of the island world. They trade the colonial good Jade, and purchase food.
Poxacoatl and his Aztecs live on medium islands in the southern zone, are few in number and believe in the infinite power of the gods. They trade the colonial goods Talismans, and purchase cloth and horses.
Amin Sahir and his Indians have a small settlement on one of the small islands in the southern end of the island world. Their Indian Ivory is a desirable colonial good.
Tetonka and his Iroquois are situated in a dense forest on one of the smaller islands in the northern zone of the island world. The Iroquois trade furs, and purchase tobacco products and weapons.
Ramirez and his Pirates take refuge in expertly concealed hideouts, and due to their aggressive nature they take rich rewards from raids, therefore they can offer you all colonial goods.
Anno 1701 is almost entirely focused on trade and economics, leaving little left over for war tactics. The combat has been simplified in some respects compared to the previous Anno game (Anno 1503), which makes it less involved and less difficult for new players.