Gameplay follows standard fighting game conventions, with matches between two characters with individual movesets, and special expendable abilities.

The groups must work together to solve the mysteries behind the P-1 Grand Prix and Labrys, a humanoid robot discovered by the Shadow Operatives.

Development of Arena began in 2010 after Atlus approached the company to collaborate on a fighting game based on Persona 4.

Should the Persona be attacked by the opponent, the player will lose a blue card situated below the health bar.

[1] Through specific button combinations, characters are able to perform a series of special attacks as well as defend themselves for a prolonged time.

[7] The story is split into two parallel narratives following the Investigation Team of Persona 4 (Yu Narukami, Yosuke Hanamura, Chie Satonaka, Yukiko Amagi, Kanji Tatsumi, Rise Kujikawa, Naoto Shirogane, and Teddie), a group of friends who investigated a serial murder case involving the TV World; and the Shadow Operatives (Aigis, Mitsuru Kirijo, and Akihiko Sanada), a covert group formed by former SEES members from Persona 3 to fight Shadows.

With their friends Rise, Kanji and Teddie missing, and Naoto absent, the remaining members decide to reassemble the Investigation Team and search for answers.

[11][12] Meanwhile, former members of SEES, Mitsuru Kirijo, Akihiko Senada, and Aigis, now part of the Shadow Operatives (an organization formed after the events of Persona 3 FES that battles Shadows), track one of their Anti-Shadow weapons, Labrys, that went missing when Mitsuru's plane was hijacked, to Yasoinaba and enter the TV World; they are joined by Naoto, who is in close pursuit, having been hired by public safety to spy on the Kirijo group.

[17][18] The participants also meet a mysterious girl without a Persona, that has entered the TV World and claims to be the student council president of Yasogami High.

[19] Furthermore, during the fights, Yu and Aigis meet a woman named Elizabeth, who wishes to test their skills with the ability known as the Wild Card, in order to obtain a new power.

Her dungeon in the TV World took the form of Yasogami High, and she adopted a false personality based on that of an unknown girl in her memories; her Shadow, meanwhile, was formed by both her desire to be understood and accepted as a normal girl, and the trauma suffered from being forced to kill her fellow Anti-Shadow weapons.

As the Investigation Team and Shadow Operatives converge and prepare to leave, the true mastermind behind the events prior to the tournament takes control of Labrys to attack everyone.

[24] After the Shadow Operatives depart, Yu also reveals his intentions, that the Investigation Team should continue working towards the same goal as Mitsuru.

[25] Atlus staff member Kazuhisa Wada had long wanted to branch the Persona series out into other genres besides role-playing so as to reach a wider audience.

This wish was shared by series producer Katsura Hashino and character designer Shigenori Soejima, and the three came up with a draft for a fighting game spin-off due to their mutual liking for the genre.

[26] Mori was shocked when Atlus first approached them, and they were highly motivated during development as many staff members were fans of the Persona series.

[28] During earlier discussions, Iguchi assumed it was a small-scale production focusing on the characters, but Hashino and Wada's enthusiasm changed his mind.

[32] While the gameplay was managed by Arc System Works, the Persona team handled the game's scenario and visual design.

[33][34] While designing the gameplay, the team worked to incorporate elements of the role-playing original, ranging from character moves to status effects.

[34] During development, Mori asked Atlus whether they could include non-playable characters such as Nanako and Ryotaro Dojima in the roster, but their requests were firmly declined.

[38] The game presented a number of firsts for Soejima's style, including drawing characters with damaged clothing and in energetic poses.

Soejima helped design key art, though another artist Hanako Oribe also contributed to the artwork including the cover illustration.

[39] Arc System Works were constantly adjusting the background designs based on Atlus's instructions, resulting in them taking twice as long to develop as their other titles.

[48] For the localization, Atlus USA did its best to bring in all the original voice cast, but due to what they described as "unspecified circumstances", the team decided to recast a couple of roles.

[57] Due to lacking a branch in the region, Atlus went through a third-party publisher; in this case, they partnered with Zen United.

[69] Ingenito positively cited the graphics, and praised the soundtrack for combining elements from both Persona and previous Arc System Works games.

[5] McGee generally enjoyed the gameplay and different modes, but found the tutorials lacking and noted some inconveniences when sorting matches.

[69] Ingenito compared the game favorably to other Arc System Works titles, noting its inclusion of RPG mechanics.

Following the success of Arena, a sequel was greenlit with the same staff, with the aim being to expand the roster and improve gameplay based on feedback from the first game.

[80][81] Titled Persona 4 Arena Ultimax, the version released for Japanese arcades in 2013, and was published worldwide for PS3 and 360 in 2014 by Atlus and Sega.