Shin Megami Tensei: Digital Devil Saga 2 is a direct sequel to Digital Devil Saga, and the conclusion of its story. In the first game, the tribe leaders of Junkyard were fighting each other in order to climb the Karma Tower and escape their grim world, reaching the promised land Nirvana. Serph, the leader of the Embryon tribe and the protagonist of the series, was the victor in their contest. He and his friends have finally reached Nirvana, yet it turned out to be something entirely different from the paradise they have imagined. The sun has turned black, petrifying anyone exposed to its rays, with the exception of those infected by Demon Virus. The Karma Society are the new rulers of the Earth, living in a city protected by a giant sun shield. Serph and his companions must confront its leaders and find out the truth about their own identities and the roles they were forced to play in their schemes.

The gameplay mechanics in the sequel are nearly identical to those of the first game. When facing randomly encountered demons in turn-based combat, characters can either fight as humans, using guns, or transform into demons, gaining access to spells and special abilities. The game adds a third option to these two: characters can choose to go berserk, essentially stopping in the middle of their demon transformation, greatly increasing their physical strength, but also similarly lowering their defense.

Like in the first game, playable characters gain new abilities by buying and learning Mantras. In order to learn them more quickly, characters can devour enemies using special abilities. Unlike the first game, the sequel allows more freedom in choosing which Mantra to purchase, without being restricted to several pre-determined ways on the Mantra field. Mantras are connected to each other on a hexagonal grid, making it possible to advance to any Mantra adjacent to a previously obtained one.