University student Ellen is lured to the Irish village of Doolin after she receives letter from her deceased mother. Occult journalist Keats receives a phone call from a distressed woman begging him to travel to Doolin as "Faerys" are going to kill her. Upon arriving, both characters are approached by strange creatures, and are called into The Netherworld - the realm of the dead.
The game begins with a narrative shrouded in mystery: why are these two characters being drawn too Doolin? Why are both characters then called to the other side?
Folklore is a tale of dark fantasy, one where the player must literally yank souls (with a satisfying Sixaxis upward flick) from "folk" - the creatures and spirits of the other side - to use in battle. The game takes an unconventional approach to tell its story: it uses both traditional CG cut scenes and text-based conversations as well as a manga-style scenes with sounds and music but no spoken dialogue.
The two worlds (the real world - the village of Doolin and the Netherworld) are shown in stark contrast: while Doolin is a quiet (perhaps too quiet?) sea-side village, the Netherworld is a strange ethereal land splashed with a wide array of colour. When in the Netherworld the player must fight folk with those they have already taken the souls from by mapping them to a face button however when in Doolin the player must seek out characters to find information from and seek quests.
