Shadows of the Damned is a third-person shooter starring Garcia Hotspur , a Mexican demon hunter. His girlfriend Paula is kidnapped by Fleming, Lord of the Demons, and Garcia follows him into the underworld to get her back. He is assisted by his sidekick Johnson, a skull that can take on different forms.
Johnson acts as a torch for melee attacks, but can also transform into a pistol, a shotgun or an automatic rifle. Each of the three gun forms can be further upgraded by collecting blue gems left behind by bosses. There are also red gems used to upgrade other abilities and health. Health can also be restored through alcohol.
Darkness is an important part of the gameplay and environment puzzles. Garcia must stay in dark areas for a short time before his health starts to drain, but this can be avoided by shooting and lighting goat heads, setting off fireworks or killing demons that spread the darkness. A special light bullet needs to be used for these events.
Garcia meets characters like Colonel and Christopher, who acts as a salesman to purchase goods. Certain levels have different gameplay and resemble mini-games, such as a 2D side-scrolling shooter with unique art design. The action is often over-the-top, and the conversations carry a humorous tone.