It is the sequel to Magic Pengel: The Quest for Color (2002) and was released in North America by Hot-B and in PAL regions by 505 GameStreet.

As in Magic Pengel: The Quest for Color, the player is able to create characters (known as "Graffiti Creatures") by drawing its body parts and assigning a function (such as "leg" or "head") to each part; however, unlike the previous game, its attacks and movement can also be customized.

New attacks and movement abilities can be obtained by "capturing" other creatures, also allowing transformation into them for a short time.

The versatility of monster creation has attracted considerable popularity, largely in Japan—a number of players have created detailed characters based both on original designs and those from existing video games, anime and other media.

While combat in Magic Pengel used a turn-based battle system similar to rock–paper–scissors, Graffiti Kingdom is a more action-oriented platform game, although it retains some RPG-style elements such as the ability to level up, which increases maximum health and energy.

The ending cinematic shows Palette rampaging through the town before being battled offscreen by Pixel and Tablet.

[4] GamePro and Official U.S. PlayStation Magazine gave it a favorable review about two-and-a-half months before the game's U.S.