Developed by Tokyo's Game Republic under legendary game creator Yoshiki Okamoto, executive producer for Onimusha, Devil May Cry and Resident Evil, Folklore is a unique, dark fantasy adventure inspired by western fairy tales and centered on the mysterious town of Doolin. The story revolves around two strangers - Keats, an unlikely journalist for a third rate occult magazine, and Ellen, an orphaned dreamer. Together they uncover a mysterious legend in a remote village that exists on the border between dreams and reality, and soon learn that the town serves as a gateway to fantastic realms, full of creatures, spirits and monsters. In order to solve the mystery of the town, and their past, the pair must journey through these worlds to uncover its secrets.

Battle monsters and creatures and ultimately collect their powers. As players harvest these powers, they in turn can use them against other monsters in battle, thus getting stronger with each monster they capture.