Fragile Dreams takes place after an apocalyptic event that wiped out most of mankind. Young Seto finds a note from his deceased grandfather urging him to travel to the red tower that lights up the night sky. Along the way he finds a young, silver haired girl Ren who drives him to journey through the ruined world in search of companionship.

Fragile Dreams: Farewell Ruins of the Moon is an action-adventure game with light RPG elements and a focus on exploring the often desolate surroundings. Players are tasked with navigating the empty environments while fighting ghosts and obtaining items such as sketches and short stories that reveal the last moments of the lives of those lost in the great catastrophe. Seto is guided through a third-person perspective and the flashlight is one of his most important aids. Controlled through the Wii Remote it illuminates dark surroundings to interact with the environment and is needed to solve many puzzles. It can also uncover hidden enemies and often a sound through the mini speaker provides a hint about their location.

The Nunchuck is used to walk, sneak around, and crouch. It is possible to go into a first-person perspective to get a better view of the environment. Additional weapons that can be picked up during the course of the game are sticks, an iron pipe, a bow, a hammer, a bamboo sword, and a katana.