IQ Panic is a quiz game with a background story. A demon has kidnapped a girl from a peaceful village, and the elders send a boy named Gengor? to bring her back, defeating the demon's minions using his intelligence and knowledge. The game has a pseudo-RPG structure, with top-down navigation, overworld, towns, dungeons, treasure chests, random and boss "battles", etc. However, real RPG elements are very light in the game: there is no leveling up, and the protagonist's health increases automatically following a plot-dictated boss encounter.

The core of the gameplay are the trivia "battles" against randomly appearing characters. Each "enemy" will ask the hero one question in a variety of topics (English language, geography, popular culture, etc.). Answering the question correctly within the time limit will "kill" the enemy, while giving a wrong answer will reduce the hero's HP by one point. Boss enemies offer a choice of topics and take several correct answers to defeat. A few items can be used to restore HP, reduce the time limit, return to a town, etc.