Taking place four years after the events chronicled in 1998's hit arcade game and subsequent Dreamcast port, Namco's Soul Calibur II continues its predecessor's weapons-based combat from within larger 3D environments complete with walls and breakable objects. Among the 13 returning characters from the series, which began in 1995 as Soul Edge, are Astaroth, Ivy, Hwang, Kilik, Xianghua, Taki, Heishiro, Voldo, and Nightmare. In addition to a retooled 3D engine featuring eight-way directional movement, a lineup of ten new characters has entered the fray, including Cassandra, Sophitia's younger sister, Necrid, a character designed by comic book artist Todd McFarlane, and Namco's own Heihachi from the Tekken series, a PlayStation 2 exclusive.

The story begins as the mysterious and powerful Soul Edge makes its presence known to the world. Infecting anyone who wields it with a lust for power and domination, the sword had most recently found its way into young Siegfried's inexperienced grip. Transformed into an entity called Nightmare, the once noble knight is rumored to have caused widespread death and destruction throughout the latter half of the 16th century. Worse yet, illness and strange happenings have befallen those who once fought for control of the evil blade. The few who survived plan on battling for the enchanted weapon once more, some to destroy it, some to harness its power for their own gain.

Seven modes include Arcade, Versus, Survival, Team Battle, Time Attack, Practice, and Weapon Master, which offers players a chance to collect over 200 weapons while fulfilling a character's distinct storyline. Players engage rival fighters while advancing across a world map and must satisfy specific conditions to win, such as performing a combo attack, defensive move, or throwing an enemy off a platform. Once new weapons are acquired, ranging from battle-axes and swords to staves and spears, they can be used in other modes of play. Arcade is based on the 2002 coin-op game, Versus has players battling a friend, Survival is a test of endurance against a steady flow of enemies, and Team Battle involves pitting two groups of characters against one another. Time Attack challenges players to defeat opponents in record time, while Practice helps players familiarize themselves with the various moves characters can perform.

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