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Konami's Gradius and space-shooter parody series continues with this second installment. Gameplay is similar to the Gradius series in that the player controls a ship that can move anywhere on the screen while the screen itself scrolls from left to right. Enemies appear in waves and destroying all the fighters in a single wave releases power-ups which may be used to choose the ship's upgrade. The upgrade bar too is lifted from Gradius, however each character has different names and functions for their upgrades.

In Gokujō Parodius!, the player is now able to now choose from eleven different characters, many of whom appear in other Konami games. They include Vic Viper, a ship from Gradius; Takosuke, "octopus" of the previous Parodius game, and also seen in at least one Goemon; Twinbee from the Twinbee side scrolling games; Pentaro, the original "joke character", who made an appearance in a previous Gradius title as a flying penguin and stars in his own game as well, Konami's Penguin Adventure; Dracula, star of Konami's Kid Dracula, and others.

In addition to these protagonists, the levels themselves are full of Konami references, bright colors, and humorous design elements. For example, it is not uncommon to have to fly a ship underneath a woman's legs, chased by a giant walrus, having enemies shooting cute pink hearts at the protagonist, etc.