As a break from tradition from previous Rare games the gameplay is simple in design, utilizing the simple premise of moving through the game's mansion and completing the required 'beat em'up' challenges for each room. Such challenges include killing all the Ghoulies in a room, beating only a specified kind of Ghoulie while avoiding killing the rest or defeating a boss before you can move on. All combat is maneuvered by a simple swivel of the control stick in the direction that you wish to attack. Any challenge failed or completed over the time limit results in the Grim Reaper coming after you (who will kill you if touched) until you exit the room. The main kind of Ghoulies in the game include Zombies, Mummies, Imps, Skeletons and Zombie Pirates. There are also various bosses that must similarly be defeated. As weapons most objects in the game are interactive similar in the fashion to the later-released influenced Dead Rising.
A young boy named Cooper Chance and his girlfriend/sister Amber are seen searching frantically for civilization since they took a wrong turn as opposed to the map. Then, a storm begins and both are forced to seek shelter in a mansion nearby. Once there, Cooper looks at the map again - but he's unaware that someone is watching them. Baron von Ghoul looks down from his window and orders his two gargoyles to retrieve them for him. Amber gets kidnapped and gets sent to the Ghouly Mansion. Cooper then runs after the gargoyles that have kidnapped her and enters the mansion. There, he realizes that Amber is now nowhere to be seen in the Grand Hallway but he meets the mansion's butler, Crivens. He tells him to go to the Archives where Amber is held. While going there, a huge group of boxing skeletons challenge Cooper to a boxing match. Cooper punches all of them and is victorious. Cooper goes there but finds out that a mad scientist is present, Dr. Krackpot. He then shoots Amber with his laser gun and she transforms into a horrible creature.
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