The game's world, the fictional kingdom of Marvel Land, was greatly inspired by Viking tales from northern Europe and the Middle Ages, with a heavy emphasis on having a sort-of "magical" feel of it.

It was originally meant to be a four-player action game in the vein of titles like Gauntlet with a cabinet-linking system similar to Final Lap, which was scrapped later on.

Namco ported the game to the PC Engine in 1990, a conversion that was met with a more mixed response for its difficulty, downgraded graphics, and altered gameplay.

[2] A time limit is present, indicated by an hourglass towards the bottom of the screen, which will deplete as the stage progresses – allowing this timer to fully empty will result in the game being over.

[2] Both players can collect gold coins by defeating enemies, which can be used in stores found throughout the game to purchase magic spells, weapons and other items.

[3] Small parts of the story to Valkyrie no Densetsu are told through in-game cutscenes and dialogue, while much of it is instead found in various pieces of Namco promotional material.

In an effort to save his family and home, Kurino Xandra embarks on a quest to retrieve a mystical item called the Golden Seed, said to grant the wishes of whoever drops it into the Northern Spring.

Kamooz, responsible for spreading destruction and chaos across Marvel Land, is also looking for the Golden Seed to enslave the inhabitants of the kingdom and make them his personal slaves, attacking Xandra and his friends.

[4] During the project's planning stage, Fujii used many of his sketches and artwork he created for Valkyrie no Boken to rework into Densetsu, including several enemies and locations.

[4] The team envisioned the player exploring a vast, open-world, with transitioning seasons and landscapes, but the vertical orientation of the arcade monitor left much of this idea heavily altered or cut out entirely.

[4] Characters were given personalities to make them "colorful" and have depth, with enemies given a sort-of humanity factor so that they wouldn't simply be hated by players.

[4] The character of Valkyrie was made to have a strong sense of justice, and to be uncompromising and strong-willed – Koakuman describes a female protagonist as "taboo" during the time of production.

[18] While Maru PC Engine liked the game's storyline and fictional world, Power Play disagreed, finding both of them lackluster and feeling like the story was simply a tacked-on extra.

[17] Reviewing the Wii Virtual Console port of the PC Engine version, Rroyd-Y of Jeuxvideo argued the shift from the traditional RPG format of Boken to the more hack'n slash gameplay of Densetsu was somewhat "inappropriate", disliking its storyline and jumping physics.

[3] Comparing the game favorably to Wonder Boy in Monster Land with its similar action-adventure gameplay, he greatly applauded Densetsu's two-player mode, graphics and soundtrack, alongside its well-designed mechanics and storyline.

[3] Kalata concluded his review by expressing disappointment that Namco chose not to widely localize the game outside Japan, instead choosing to export rushed translations of titles such as the Tekken series.