The game is set in Europa, a fictional region loosely based on Europe during the early years of World War II.

Because of its abundance of Ragnite ore, which takes the place of petroleum in the game setting, the neutral nation of Gallia comes under attack from the East Europan Imperial Alliance, which is itself engaged in war with the Atlantic Federation.

[9] During Target Mode, the player is in direct control of characters' aim while the action freezes, allowing for head shots and other maneuvers.

[9] By using their troops the player must fulfill various conditions depending on the mission in order to achieve victory, most often the capture of a major enemy encampment.

Upon completing missions, the player is awarded money and experience with which to upgrade their materiel and character classes, respectively, and the game's story is advanced.

Each character in the game fulfills a specific role — for instance, Alicia is a mid-range rifle-toting Scout, while Welkin is a Tank Commander.

Other roles include Shocktroopers (assault infantry); Lancers, who specialize in anti-tank warfare; Engineers, who have poor combat skills but can repair tanks, remove landmines, and replenish the ammunition of allied soldiers; and Snipers.

While each character within a class is basically similar in terms of weaponry and statistics, each individual has a distinguishing set of Potentials: special abilities or stat modifiers triggered by various psychological or environmental factors in battle.

As the Gallian forces advance across the battlefield, control points can be captured, giving the player a tactical advantage and offering additional locations in which to call reinforcements.

As Welkin, the player can issue various Orders for the purpose of things such as artillery strikes, supervising medics, and improving offensive or defensive capabilities of various characters.

Together with Welkin's adopted sister Isara and using Belgen's prototype tank from the first war, the Edelweiss, they escape to the capital city of Randgriz and join the Gallian militia.

After Squad 7 wages a successful campaign against Imperial forces, the crown prince Maximilian deploys one of his commanders, Selvaria Bles, a rare descendant of the Valkyrians who are believed to have saved the ancient world from the Darcsen race.

At the cost of her own life, Selvaria uses the "final flame" after the capture of the Ghirlandaio fortress, killing the entire core of Gallian military and leaving only the militia, including Squad 7, remaining.

In an attempt to create his own empire, Maximilian uses a "land dreadnought", the Marmota, to break through Gallia's defenses and steal a giant Valkyrian lance from inside Randgriz Castle.

The two were part of neighboring teams working on different games; Nonaka was leading production on Nightshade, while Tanaka was completing the GameCube port of Skies of Arcadia.

Nonaka and Tanaka later said the many similarities to Sakura Wars were mainly because of shared development teams and gameplay styles rather than conscious choices.

[14] During its early concept stages, no platform had been decided; Nonaka vaguely thought the game would be produced for the PlayStation 2, for which the team had been principally developing.

[18] The AP system was designed around the concept of emulating the fear of soldiers in combat, afraid to take a step in case of hidden enemies or making a fatal move.

[26] The game's idyllic scenery was influenced by the team's desire to incorporate fantasy, as a purely urban setting might reduce the opportunity for fantastic elements.

[21] While the leads Welkin and Alicia and much of the key supporting cast were present from the earliest stages, several had different artistic designs and several concept scenes and more fantastical elements such as floating islands were dropped from the final game.

[23] The game's early internal promotional videos focused on the art style over gameplay, as the team knew if they simply described its genre it would give the wrong impression to executives.

[22] Valkyria Chronicles made use of a proprietary game engine dubbed CANVAS, which produced stylised graphics modelled on watercolor paintings.

[15][20] Nonaka wanted to blend traditional animation style with CGI elements, something he had previously experienced with the "Neo-CGI" used in Sakura Wars 3: Is Paris Burning?.

[15] Using the CANVAS engine was a challenge for the designers and programmers due to its heavy hardware demands, with the team's PC development needed two stacked graphics cards to run the software without crashing.

[22] The music was handled by Hitoshi Sakimoto, a composer noted for his work on the Final Fantasy series and other projects through his company Basiscape.

[31] Originally treating as a musical investigation of war, Sakimoto's discussions with the staff began steering the score towards portraying the romance between Welkin and Alicia.

Press and public were invited, and Sega used a raffle to give away soundtracks, figurines of the characters, matted art posters signed by Nonaka, and an 80 GB PlayStation 3.

The PC release features performance improvements, including the ability to play the game at 60 frames per second and on resolutions greater than 1080p, in addition to customised control mapping.

Outlet Crash Landed praised the remastered versions visuals and still stellar gameplay in their review, but criticized the lack of PlayStation 4 functionality implemented.

[53] Kevin VanOrd of GameSpot was impressed with the title's gameplay design, noting that it gave players a new sense of tactical freedom absent in other games of the same genre via the removal of certain staples such as a grid-based map.