Described as a "multiplayer brawler",[2] the game is a comedic beat 'em up title with a stylistic presentation inspired by kung fu films.

Kung Fu Chaos was the first title developed by Ninja Theory, a Cambridge studio formed by former staff of Millennium Interactive to pursue an independent project.

Kung Fu Chaos was a commercial disappointment upon release, with the developer attributing poor sales performance to a lack of marketing on the part of the publisher.

Kung Fu Chaos is a fighting game that takes place within the shooting of a fictional film of the same name, with director Shao Ting acting as narrator and guide to the gameplay.

Antoniades made the decision to leave Millennium Interactive and form an independent studio after Sony rejected his pitch for a proposed title named Moon Warrior, a kung-fu fighting game inspired by Once Upon a Time in China.

The duo stated the soundtrack was inspired by Lalo Schiffrin’s music on Enter the Dragon and was "a fusion of funk and authentic Chinese instrumentalists".

[11] In Japan, the game was ported for release under the name Kung Fu Panic (カンフーパニック, Kan Fū Panikku) on 29 May 2003.

"[14] Antoniades stated that the game "tanked at retail" as it had a limited marketing budget with "no ads (and) no support",[2] a position shared by outlets including Kristan Reed for Eurogamer, who speculated that Kung Fu Chaos experienced low sales "given the fact it has devoted a slim marketing budget to the title.

"[25] Evan Shamoon of Xbox Nation praised the levels as "notable achievements, offering an impressive degree of dynamic interaction and a constant stream of eye candy".

[31] Dave Rees of Official Xbox Magazine praised the game's "wild atmosphere", stating "there's a lot of added depth in how you can interact with objects and use the environment to your advantage.

"[24] Hilary Goldstein of IGN observed that "the fighting engine is so incredibly basic" and "too easy", remarking that "there are so few moves that combos become an unconscious act.

Writing for GameSpy, Christian Nutt critiqued the "questionable sense of humor" in the game, dismissing the character Shao Ting as a "completely racist and utterly despicable caricature of an Asian man.

[10] Several publications praised Kung Fu Chaos after release, with many describing the game as an overlooked and cult title on the Xbox.

[2] By March 2003, Just Add Monsters completed concept work for Kung Fu Story, including prototype videos to demonstrate the desired art style for the game.

However, by May 2003, due to the poor commercial performance of Kung Fu Chaos, Microsoft made the decision not to commission a sequel for the Xbox.