PlayStation All-Stars Battle Royale is a fighting game which plays conceptually similar to that of Nintendo's Super Smash Bros. series. Up to four players can battle each other using characters from various Sony franchises such as God of War, PaRappa the Rapper and Sly Cooper, as well as third-party franchises like BioShock. There are, however, differences in how opponents are defeated. During the game, players damage other players to receive orbs that build up a power meter at the bottom of the screen (These orbs can also be found on the stage over the course of the match). Earning enough power allows players to use one of three levels of super moves which can be used to defeat opponents and earn points. The game features cross-platform play between the PlayStation 3 and PlayStation Vita versions.
The game features a traditional single-player arcade mode, in which players must defeat several randomly-selected opponents, followed by a character-specific rival battle and, ultimately, a battle against the game's main antagonist and final boss, Polygon Man. Multiplayer modes include time-based matches, where players compete to achieve the most kills within a time limit, stock based matches, where players attempt to be the last one standing, and kill-limit matches, where players compete to be the first to reach a certain number of kills. The game also features a single-player challenge mode, in which players attempt to complete specific objectives.