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PlayStation All-Stars Battle Royale is a crossover fighting game featuring characters from various PlayStation titles and some third-party games, akin to Nintendo's Super Smash Bros. series. Up to four characters battle in side-view 3D arenas. Matches are not won by depleting health but by collecting orbs to fill a power meter, enabling the execution of super moves to defeat opponents and score points.

Game modes include a single-player arcade mode with a final rival battle and a showdown against Polygon Man, Sony's former mascot. There's also a challenge mode with specific objectives. Multiplayer modes offer time-limit matches, stock-based matches (last player standing), and kill limit matches. Cross-platform play between PS3 and Vita is supported, with a free Vita version available via cross-buy.

Each character has unique moves, throws, and special actions. Stages are themed around popular franchises, featuring dynamic environmental elements that affect gameplay. Offensive items can be picked up, and additional costumes can be unlocked for characters.

The base game features 20 playable characters:

- Big Daddy (BioShock)
- Cole MacGrath (inFAMOUS)
- Colonel Radec (Killzone)
- Dante (Devil May Cry)
- Evil Cole MacGrath (inFAMOUS)
- Fat Princess (Fat Princess)
- Heihachi Mishima (Tekken)
- Jak and Daxter (Jak & Daxter)
- Kratos (God of War)
- Nariko (Heavenly Sword)
- Nathan Drake (Uncharted)
- PaRappa (PaRappa the Rapper)
- Raiden (Metal Gear)
- Ratchet and Clank (Ratchet & Clank)
- Sackboy (LittleBigPlanet)
- Sir Daniel Fortesque (MediEvil)
- Sly Cooper (Sly Cooper)
- Spike (Ape Escape)
- Sweet Tooth (Twisted Metal)
- Toro Inoue (Doko Demo Issyo)