The game takes place within a castle in which the player must seek out the "Golden Key of ACG"[a] by unlocking doors and avoiding enemies.

The game is presented in a top-down perspective (albeit with sideways-on action) and is set inside a complex, labyrinthine castle with multiple floors (accessed by staircases and timed trapdoors) and secret passages.

[3][4] Each character has different ground friction, a different weapon to kill common enemies and access to a secret passage unique to them, meaning that navigating the castle is different for each one.

There are also stationary poisonous fungi which will drain health constantly if the player is in contact with them, and enemies that require special items in order to either distract, repel or kill them, otherwise they remain in the room, invulnerable to conventional attacks, and rapidly drain the player's health if touched.

[7] Prior to founding Ultimate, the Stamper brothers had backgrounds in designing arcade machines, but no marketing experience in the video game sector.

However, they criticised the difficult joystick control and vague instructions, adding that the entire game is a "learning experience".

[4] In a retrospective interview with Retro Gamer, Rare designer Greg Mayles asserted that their 2003 game Grabbed by the Ghoulies was not inspired by Atic Atac, despite their similar themes of a haunted mansion.