Gun Hazard is a side-scrolling shooter with strong RPG elements, and a spin-off of the Front Mission series. Gameplay is more than a little similar to Cybernator or Metal Warriors. The player moves between different stages on an area map. Once inside a stage, the player controls Albert and his wanzer as it moves left, right across the screen. The wanzer is able to jump, and attack with a primary and a special weapon. At any time during a stage, Albert can eject from his heavily armed wanzer to explore. Although vulnerable when outside, Albert is able to reach areas the wanzer cannot, in addition to being a smaller target and being able to jetpack indefinitely.

Money and experience are earned through the completion of mission objectives as well as the kill count of enemy wanzers. Additionally, Albert can recruit other characters through the normal course of the story, some of whom can be designated to support roles. These support characters when set can provide a variety of different cover fire abilities for Albert during his missions. They too gain experience and levels. Different weapons and armor can be found or bought. Essential components include the Booster ability which allows the wanzer to hover and increase its jumps, as well as the Dash ability which allows quick left-right movement by the wanzer.

Set in 2064, the story of Gun Hazard takes place all over the world in an alternate Front Mission universe. In the early 21st century, nations around the world fought over the control of natural resources. With natural resources dwindling in supply, the nations of the world eventually banded together to seek a solution to the growing crisis. Realizing the potential in space-based energy, they began development of an orbital elevator known as "Atlas" in 2024. As the orbital elevator's completion drew near, a breakthrough was achieved in miniature fusion reactors. The countries responsible for Atlas began to halt development of the orbital elevator and pursued miniature fusion reactor technology. Left unfinished, Atlas became a symbol of failed dreams and hopes as the world regressed back into a world of conflicts. One such conflict is the Bergen coup d'état in 2064.

The plot of Gun Hazard revolves around a soldier based in Bergen, Norway named Albert Grabner (whose parents reside Eningen, Germany). In January 2064, Ark Hellbrand of the Bergen Army stages a coup d'état in an attempt to overthrow the government led by President Moss Orwen. As the coup d'état forces begin to take over the country, President Orwen radios for assistance from NORAD and a faction of the Bergen Army loyal to him. Albert Grabner is sent to act as the president's bodyguard and helps him escape the country. However, the two are eventually captured by Hellbrand. Albert escapes from prison with the help of Brenda Lockheart, a mercenary employed by the Kernelight Association. Upon escaping Bergen and reaching New York City, they visit the Kernelight Association headquarters. Hoping to return to Bergen and rescue Orwen, Albert agrees to working for the Kernelight Association to find allies that can help him overthrow Ark. As the two work for the mercenary guild and travel to war-torn countries around the world, Albert begins to see a link between the civil conflicts, the Bergen coup d'état, and an organization only known as "The Society".