In single mode, the player is initially only able to choose between two characters (Habaki and Senzo). Other characters are unlocked progressively at the successful completion of each stage. The game is named after the setting, a mystical island called Kasumi Island. The objective of the game was to kill the game's boss, Gyaku, in his true form: a demon. Only by killing Demon Gyaku can the player reach the best ending.
Kasumi Ninja features a three-dimensional battlegrounds using parallax scrolling technology. The game's control system feature punch, kick, and special move buttons. The two player versus mode requires the use of a code for players to choose the same character.
The game was given a "Mature" (17+) rating by the Entertainment Software Rating Board for its graphic violence and gore. Kasumi Ninja was one of the first video games to allow parents to censor the level of violence allowed in the game by using a six digit password. When the parental lock is enabled, a code is needed to select the "Gore Fest" gore level. The possible gore levels are: None (no blood), Combat (small amount of blood, but none from swords), Disturbing (more blood than Combat, and blood dripping from the swords), and Gore Fest (the only mode with death moves, the most blood, and it has to be unlocked with a parental lockout code).
Characters: Habaki - Senzo - Angus - Alaric - Danja - Thundra - Pakawa - Chagi - and, Gyaku.
Kasumi Ninja went through several changes before it was released to the public. It was previewed approximately eight months before its original release by a video game magazine distributed via CD.[clarification needed] In this preview, the game had a very heavy story element to it. Players were represented by a guardian spirit of Kasumi Island and could only begin the game as Senzo or Habaki (who originally was represented by the Gyaku character sprite). The spirit would take possession of either Senzo or Habaki and, during the main game's storyline, the characters would have to do battle with the other champions of Kasumi Island in order to free their spirits. This would enable them to do battle against the evil polluting Kasumi island. Beating the game with each character would produce a specific key which, when combined, would unlock the gates to the final confrontation with Lord Gyaku. This method of gameplay would have required the player to invest more time in order to complete the story mode. Players would have to navigate the labyrinth to find their opponents, and characters would be unlocked for play only as they were defeated by Senzo and Habaki. Players would subsequently have to play through each character and defeat all others as they became unlocked.
Many of the backgrounds and character designs went through several revisions. For example, Alaric was named "Eksel" and his default outfit had red trim, as opposed to blue. Habaki was garbed in black, but this was changed to represent Lord Gyaku. A fourth palette-swap ninja, garbed in blue, was seen in previews but apparently never made it to the final game. This blue ninja was thought to be either Gyaku's original outfit, or the 'unknown disciple' mentioned in Senzo and Habaki's character profile, possibly featured as a secret character yet to be discovered. The name "Tsuba" appears in the beta versions character selection room, but it is unknown if that was another characters "working name".
The final game was a rushed project. The development team tried to get Kasumi Ninja finished in a 'timely fashion' (holiday season 1994), so the story mode was dropped in favor of the fighting concept minus the storyline. The labyrinth exploration and key gathering concept was condensed, but the character unlocking system remained intact. Players were not required to use unlocked characters to defeat every other character before opening up another character for play, however.
The game was universally panned by critics. It has been criticized for being a blatant rip-off of Mortal Kombat (including gameplay, digitized graphics and graphic violence) with poor controls. GamePro commented that the graphics are technically impressive, but often unpleasant to look at due to aesthetic choices such as the palette swapped characters, the massive blood drops, and Angus's kilt-lifting move. They also criticized the controls, the music, and the announcer's voice, and concluded "Kasumi's a 64-bit warrior destined to remain in the shadows of deeper 16-bit fighting games." Next Generation Magazine gave it one star out of five, calling it "a tragic example when good ideas are poorly executed" and citing "jerky animation", "sluggish control" and "baffling gameplay mechanics that discourage close-up fighting".
In a retrospective review, Allgame praised the game's visuals, but criticized the controller and concluded the game to be no more than "a horrible cash-in" Mortal Kombat clone that "should be ignored by all but the most devoted 64-bit Atari Jaguar fans." GamePro summarized that "Kasumi Ninja was a terrible, terrible Jaguar title - bad controller, bad controls, terrible menu set, forgettable characters, and an utterly unoriginal premise - that, thankfully, history has forgotten."
In 2009, Topless Robot ranked it as the fourth worst Mortal Kombat rip-off. In 2011, UGO.com included it in their list of the 102 worst games of all time. That same year,Complex called it "one of the worst Jaguar games ever released in a sea of awful Jaguar games." In 2012, Complex also ranked it as the fourth worst fighting game of all time, adding, "It was hard choosing amongst Ultra Vortek, Fight for Life, and Kasumi Ninja for the worst Jaguar fighting game, but we’re going to go with the last one mentioned because it’s probably the most famous. And also the worst."