Color Wars is a puzzle game in which up to four players try to win by putting colored balls on poles, converting adjacent balls to their color. Each stage consists of a rotatable 3D screen containing a number of poles of the same height. Players take turns in placing balls onto these poles. Adjacent balls (horizontally, vertically, or diagonally) can be "captured" and hence change their color. Points are awarded per ball of each color. The round ends when there is no more place on the poles to put balls onto, and the player with the most points wins.

The story mode begins with an introduction depicting a powerful demon that can only be vanquished by traveling to the Color World; a young pilot ventures there and must defeat opponents in the Color Wars game at each stage. This mode puts one player against three AI-controlled opponents; the free mode also allows four human players to compete against each other. Two-player mode can be played by either two human players or one player against computer AI.