Panic in Nakayoshi World is 2D top-down arcade game. The game features characters from manga and anime series such as Sailor Moon, Cho Kuse ni Nariso, Kurumi & the 7 Dwarves, and Goldfish Warning. Strange monsters are attacking the World of Nakayoshi. Four girls must stop the monsters to save that world.

The story mode has five big stages, with six rounds in each stage. On each round, the player must defeat all fifteen enemies, or defeat ten to fourteen enemies and go through the door that appears with the player's "ally" (non-playable friend, who can walk with the heroine) in tow, all before the timer runs out. The player can also destroy large blocks - in some of them there are hidden bonuses.

The game has a multi-player battle mode - players race to find a key hidden somewhere within the blocks.