Players take the role of either Claris or Eliot, two children living in the city of Twin Seeds. In their dreams, they enter the world of Nightopia, where all human dreams are played out. An evil creature known as Wizeman is gathering power to take control of Nightopia. The children team up with NiGHTS, a citizen of Nightopia (called a Nightmaren) trying to stop Wizeman.
The goal of each level is to capture 20 blue chips to overload the Ideya capture and take back the orb it holds. After playing through four stages, NiGHTS is transported to meet and defeat another Nightmaren.
Aside from the immediate game mission, there is the complex and involving artificial life creatures called Pians and their genetically modified counterparts, the Mepians. The game featured an evolving music engine based on the happiness or other moods of these creatures.
The unique features of this game centre on NiGHTS' flying sequences. Movement is natural and fluid; mulitple moves can be freeformly played and linked and all with such a simple control mechanic. The game came bundled with an analogue joypad, one of the first on any home console.
After the critical success of the original game, Christmas NiGHTS came to appease player demands for a sequel. A second sequel is considered unlikely, with the nearest development being the DoCoMo mobile phone game.