It is a remake of the original Hydlide (1984), incorporating full 3D graphics and a player character digitized from a live actor.

The player takes on the role of a hero on a quest to defeat an evil demon named Varalys who has turned the princess of Hydlide into three fairies.

Next Generation said that the game is "visually stunning" with its over-the-shoulder viewpoint and fully 3D environments, but suffers from awkward and "more-or-less tedious" gameplay.

[6] GamePro, in contrast, said the visuals take time to get used to due to confusing camera angles, clunky scrolling, and graininess which makes it hard to spot items.

However, they praised the medieval orchestrated soundtrack and said the game "kind of grows on you", concluding that though most gamers would be put off by Virtual Hydlide, some would find it worthwhile for its compelling next generation elements.