The story is a continuation of the events depicted in the game Persona 4 Arena and begins the day after it concludes. The Midnight Channel is back on the air and once again broadcasts a strange advertisement for another fighting tournament christened P-1 Climax, that shows members of the Investigation Team and the Shadow Operatives in combat. Just moments after this, Inaba is subject to a power outage and is engulfed by a bizarre red fog.
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(Source: Megami Tensei Wikia)

Following the plot of the game, it switches between the viewpoint of different characters as they face off against each other in the tournament. Commonly following the story from the viewpoint of Yu Narukami, Aigis, Yosuke Hanamura, Mitsuru Kirijo, and Naoto Shirogane as they face off against the other characters. Both Yosuke and Aigis face off against Shadow Labrys.

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