[3][4] The game follows the interconnected stories of dual protagonists Nathan "Nate" Adams, an 11-year-old boy who recently moved to the fictitious city of BBQ in the Southern United States, and Hailey Anne Thomas, a self-styled otaku "outcast" who opens a detective agency in the upstate city of Springdale and replaces Katie Forester as the female protagonist.

The game received generally positive reviews from critics, but was considered a commercial failure outside of Japan; to date, it is the last title in the series to be released internationally.

The player controls Nate, who wields a hammer to defeat zombies and must reach and ring the Mourning Bell, which ends the curse and wakes the town.

[6] The plot of Yo-kai Watch 3 initially follows dual protagonists Nate Adams and Hailey Anne Thomas, whose stories eventually intertwine into one narrative.

The game's humor leans heavily into parody, often poking fun at pop culture, science fiction, and classic tropes of mystery-solving.

[7][8] Nate's story follows him as he moves from the upstate American city of Springdale to the southern town of BBQ for his father's job and encounters 'Merican Yo-kai.

[9] After their stories converge, they fight against the Ghoulfather, who is styled as a satirical nod to mob boss archetypes from classic gangster films and aims to remake the world in his image.

The Western release instead frames the shift as a move from a Japanese interpretation of an average American city to a representation of the Southern United States.

For example, an early plot element in the original Japanese release involved Nate not understanding the residents because he does not know English, with minimal straight comedy.

[27] In the United States, GameSpot scored the game 6/10, calling it "a fun time" and "a cheerful, wacky playground where Pokémon-like creatures happen to live.