The player controls a ninja named Joe Musashi who has to stop a criminal organization called “Zeed” who are kidnapping the children of his ninja clan. Through five missions (consisting of three stages for the first mission and four stages each for the rest), Musashi must make his way to Zeed’s headquarters and free all the hostages in the first two or three stages before confronting the boss at the final stage of each mission. At the start of each mission, the player is shown their objective, followed by a file containing a photograph of the enemy boss and a map display pinpointing the location of the next stage.The controls of Shinobi consist of an eight way joystick and three action buttons for attacking, jumping and using ninjutsu techniques (also called “ninja magic” in the game). In addition to the standard walk, the player can perform a crouching walk by pressing the joystick diagonally downward. The player can jump to higher or lower floors by pressing the jump button while holding the joystick up or down. Musashi’s standard weapons are an unlimited supply of shurikens, along with punches and kicks when attacking at close range. Rescuing certain hostages in each stage will grant him an attack upgrade. When powered up, his throwing stars are replaced by a gun that fires large, explosive bullets, and his close-range attack becomes a katana slash. Musashi’s ninjutsu techniques can only be used once per stage and will clear the screen of all enemies, or in the case of enemy bosses, greatly damage them. There are three ninjutsu techniques in the game (a thunderstorm, a tornado and a doppelganger attack) that vary depending on the stage, although the effect is the same no matter which technique Musashi uses (only the animation changes).Enemy characters include punks, mercenaries, various kinds of ninjas clad in different colors and the Mongolian swordsmen who are guarding each hostage. Musashi can bump into most enemies without harm and can only be killed if he gets struck by an enemy’s attack (such as a punch or a stab), gets hit by a projectile or falls into a bottomless hole. When that happens, the player must restart the stage from the beginning, although hostages that have already been saved don’t need to be rescued again. When the player runs out of lives, he can insert additional credits to continue the game. This option is not available during the final mission. The player has a time limit of three minutes to complete each stage. Bonus points are awarded based on how quickly the player took to clear the stage, along with additional bonuses if the player clears the stage without using a ninjutsu technique or using only melee attacks. Extra lives are awarded by achieving certain scores.
Between missions, the player participates in a bonus round played from a first-person perspective where he must throw shurikens at incoming enemy ninjas without letting any of them get near him. If the player successfully completes a bonus round, he will be awarded with an extra life.