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Plot

At the end of Might and Magic III, the eight main characters piloted a seedship named "the Lincoln" in pursuit of the Guardians Corak and Sheltem. However, rather than landing on the world of Xeen as the Guardians did, they drifted off-course and eventually crash-landed in the seas on the distant planet of Colony. After an ensuing disagreement, the eight characters split up into two groups - one "good" and one "evil" - and begin to explore the nearby continent of Antagarich, each with their own agenda.

Meanwhile, having fled from the continent of Enroth after the events of Might and Magic VI, Archibald Ironfist, the brother of King Roland, takes up residence on the continent of Antagarich, forging an alliance with the Necromancers of Deyja and becoming their leader. Meanwhile, the wealthy Lord Markham announces a scavenger hunt on Emerald Isle - first prize is the deed to the somewhat neglected Castle Harmondale - and a new party of player characters takes up the challenge. From there, the party's status in Antagarich begins to escalate until, eventually, the fate of the world lies, as always, in their hands.

The "good" four Might and Magic III characters, led by the Cleric Resurrectra, reach the southern Wizard kingdom of Bracada and become the advisors of the Immortal King, Gavin Magnus. They begin to research a means of reawakening a forgotten Gate created by the Ancients, capable of allowing them to reach the two warring Guardians and perhaps even the enigmatic Ancients themselves. The "evil" characters, led by the dark Sorcerer Kastore, intend to use the same research to revive the Ancients' broken Heavenly Forge, capable of creating futuristic weaponry beyond compare. With these weapons, they can easily conquer the entire continent. The four villains travel to Deyja where they become apparent "advisors" to Archibald Ironfist.

The four player characters, now the rulers of Harmondale, are eventually presented with a choice - join with Resurrectra and Magnus in reviving the Gate, thus committing themselves to the "good" side, or assist Kastore and his associates in awakening the Forge, joining the "evil" alignment. During their adventures, subplots from the Heroes of Might and Magic series as well as some from the previous installment, Might and Magic VI, spill over into their quest.

A plot twist occurs during the course of the game in which Archibald is essentially deposed by Kastore. Overcome by weariness and guilt for his past crimes, Archibald contacts the player characters (regardless of their alignment) and offers his aid in rescuing his captive brother, Roland, from the hands of the diabolical Kreegans. In a bizarre turn of events, Roland's wife, Queen Catherine Gryphonheart, has recently returned to her homeland of Erathia and also offers her aid. The player characters destroy the Kreegan monarch, Xenofex, and the Ironfists are reunited. The reformed Archibald renounces his claim to Enroth's throne, and departs in peace. This subplot directly relates to the events of Heroes of Might and Magic III: Armageddon's Blade.

The game has two different endings depending on the party's chosen alignment. The final quest for both sides involves entering the eight Terrans' sunken seedship, the Lincoln, and retrieving the Osciliation Overthruster, the final device needed to power each side's respective instrument of victory.

Resurrectra's party uses the Overthruster to repair the Gate, thus being transported to a neighbouring space station where the party meets Corak (that is, a second C.O.R.A.K. module Guardian - another appeared throughout Might and Magic II-V) who reveals the nature of the Ancients' war. This ending is canonical, as hinted throughout Heroes of Might and Magic III: Armageddon's Blade. The in-game epilogue message reads:

If the player presents the Overthruster to Kastore, his party uses the it to revive the Heavenly Forge, thus producing an endless supply of futuristic weaponary capable of dominating the world. This ending was planned to be canonical, leading into the events of Heroes of Might and Magic III: Armageddon's Blade, though the "Forge" faction intended to appear in that game was scrapped due to negative fan reaction towards the sci-fi crossover. The in-game epilogue message reads:

Gameplay

The game is closely similar to Might and Magic VI in many aspects. It uses the same graphics engine (only adding hardware acceleration, which offered little improvement over the software engine), nearly completely the same audio effects (but introduces new musical tracks), the same skill & combat system (apart from the addition of Grand Master expertise in skills) and the same nonlinearity.

Two of the side-quests involve the minigame Arcomage. The first is to obtain a set of Arcomage cards and once this has been done, the player may play Arcomage in all of the taverns in Antagarich. The second is to win a game of Arcomage at each of these taverns.

There are two unique twists in the game which were not found in the previous. First, the player finds an artifact coveted by two warring factions, and has the opportunity to give it to one side or the other. The choice will make the player a subject of the favoured faction. The player may also choose to hand over the artifact to the Arbiter of the dispute, which will later seal the independence of the player's realm. Second, the player is ultimately forced to choose between serving Light or Darkness. Once the choice is made the game display permanently changes color to either white or black.

Both paths have unique classes -- for example, a Crusader can become a Hero (light) or a Villain (dark) -- and certain quests are only accessible to one side or the other. If Light is chosen, then the guards in all Darkness-aligned towns become hostile towards the player, and vice-versa.