In the future, humanity has created specialized androids known as ADAM (Autonomous Armed Duel Machines) to fight their conflicts on their behalf, ending years of pointless killings. The ADAM, unfortunately, were a bit too successful, so the need for competition has been completely eliminated since then. It was decided (for unclear reasons) that instead of simply destroying the remaining androids, a tower would be built specifically to house the remaining deadly robots. The ADAM androids have been imprisoned in this tower and, like Roman gladiators, are forced to fight to the "death" against each other. The only difference is that there is no reward for the winner.
The action-centered gameplay is at the heart of Rengoku 2. Your ADAM starts in the tower with nothing more than its fists to defend against the other androids. When you defeat your enemies, they will occasionally drop weapons or Elixer Skins, which can be used to enhance aspects of your character such as health, defense, and other attributes. After collecting many weapons, you can return to a terminal, a central hub located at the start of each floor of the tower, to equip them. Some weapons can be used in multiple slots, while others can be placed only in one slot (for example, the Auto Crossbow can be placed on the head and arms, but not on the torso). Weapons can be equipped on the hands, the director (arms), or the torso. Each body part has its corresponding button (square represents the left hand, circle represents the right hand, X represents the torso, and triangle represents the head). Linking your attacks with your weapons can lead to some particularly fierce combos. You can increase the chance that your opponent drops more Elixer Skins or that Flamethrower you saw them using a few seconds before you backed off to a safe distance and hit them with a guided missile storm if you build huge combos as your opponent dies. This strategy is known as "Overkill" and is one of the game's secret moves.
The pace of the game is as simple as the gameplay itself. You eliminate all enemies on the current floor, fight the boss of that floor, and then move on to the next floor to do it all over again. Along the way, you collect weapons and undergo upgrades. As you progress deeper into the tower, the opponents you face will not only start using increasingly powerful weapons—some of which you can steal for yourself—but they will also begin to cooperate in their attacks against you.
There is also a multiplayer option that uses the game sharing feature, meaning you can upload a demo to your friend's PSP even if they do not own the game themselves. The multiplayer mode consists exclusively of hand-to-hand deathmatches. Each player starts the game empty-handed and must search for weapons and other items in the environment or destructible containers. There is no way to know what you will get until you grab it, as all pickups look the same. This gives multiplayer a random, on-the-fly approach, making it more interesting.