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20 years ago, an alternate World War II occurred, where both Axis and Allies developed mecha technology, known as Armored Fighting Walkers (AFWs). As a result, battles continued in different ways and Russian forces were more instrumental in the eventual defeat of Japan. The end of the war has had Japan divided between the allied forces, similar to Germany. Japan is now split into a communist North Japan and an Democratic South Japan, governed separately. Without any obvious cause, Japan erupted into civil war between it's halves for four years. Dubbed the "Japan War", it further weakened Japan's economy and fueled resentment between people living in the North and the South. In 1964, Masami von Weizegger is a AFW pilot in the South Japan forces. While field testing a prototype AFW, it is stolen by North Japanese agents and Masami is dispatched to recover the stolen material. As Masami's team attempts to retrieve the AFW, they stumble into a military operation that threatens to erupt into all-out war.

Ring of Red is a turn-based action/strategy game set in an alternative post-World War II Japan. Players take the role of members of the South Japan military who are put on a hunt for a stolen AFW. During battles, mechs are moved into position on a grid-based map and may engage different enemy units or occupy specific points. As turns are taken, time passes, shifting the battlefield through daytime and nighttime hours as well as different weather effects. All of these affect the accuracy of weapons as well as the types of abilities that can be used. Battles end when objectives are met by either side.

Putting a twist on the turn-based genre, Ring of Red features turn-based movements with real-time combat. When two AFWs engage on the battle grid, players are taken to a real-time battle where they have limited time to engage one another before refueling is required. Here the AFW is viewed from 3rd person and may be moved forward and back and given orders. Firing on the enemy requires aiming, in first person, by the player. The AFW uses a steam powered cannon which must be pressurized before firing, aiming at either an enemy AFW or at enemy support crew. Additionally AFWs can engage in close combat if they are close enough, delivering punches to one another. Each AFW pilot also has his own statistics and own special abilities, that can be used only once per battle, that can be called upon at any time. AFWs also feature unique statistics, being divided into four types: Standard, Light, 4-Leg (Heavy) and Anti-AFW.

Each AFW unit is actually a group made up of three ground units: one of which acts as crew for the AFW, while the other two walk alongside. Support units are divided into types including: Infantry, Shooter, Supply, Medical, Mechanic and Recon. Each of these types of "support units" has different skills in battle and individually have different abilities and statistics. The abilities available and used change depending on which positions the units are assigned to. Additionally many special abilities need to "charge" in the rear ranks before becoming available for usage. These abilities include firing special types of munitions (including flash, heat, smoke and impact), laying down mines or tripwire, laying down a barrage of fire, throwing grenades, healing units, sniping specific targets, morale boosts, AFW repairs, neutralization of enemy effects and disarming enemy mines/tripwire.