Originally Posted by
Urat
+1 BP damage increases the damage of your BPs by 1%.
Magic damage adds +1 base damage to the magic ability. Much like adding +1 base damage to a weapon for weaponskills/attacks.
Magic attack uses a formula that compares your matt vs enemies mdef and gets a constant from that, then multiplies that against your damage formula.
IE if your matt > enemies mdef, you get a positive multiplier based on how much more you have, increasing damage. I think but am not 100% sure its diminishing returns...
If your matt < enemies mdef, you get a 0.something mod that lowers your damage (ie 0.5, 0.3333, 0.8... whatever) depending on how much more mdef the enemy has.