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The game features a card-based combat system as well as multiplayer support. Using Nintendo Wi-Fi Connection, two to four players may team up for battles or to participate in mini-games.
Gameplay consists of exploring the environment to find picture books. The player is transported into the pop-up worlds of the book must complete different mini-games to unlock the next part of the story, new cards, chocobos, and books.
The stories in the books are mostly based on classical fairy tales, but are adapted to suit the Final Fantasy universe. The stories' protagonists are chocobos and other Final Fantasy creatures.
Throughout the world of Chocobo Tales are hidden micro-games, which are more simplistic mini-games. These are not located in pop-up books and are not required for the progress of the game.
The player may also participate in Pop-up Duels through the use of pop-up cards.
- Chocobo is the main protagonist of the game. He is a clever, young chocobo that accidentally releases Bebuzzu.
- Shirma, the white mage is a friend of Chocobo and the player's guide in-game.
- Croma is a black mage who likes to go on journeys. During his latest journey, he found a mysterious book. Without thinking, he opened it and inadvertently invited misfortune to the island.
- Irma is a secondary antagonist of the game. She raises chocobos and is trying to beat Chocobo and friends to the book. Snippy and cruel, she has a tragic past. She becomes nicer throughout the course of the story.
- Cid is a trustworthy and questionably genius inventor. Though he moved away before the events of the game, he returns to the island mid-way through the story to help Chocobo and friends in their quest to recover the mysterious book.
- Mog is a moogle. His alter ego, "Dueler X", teaches Chocobo how to pop-up duel and otherwise assists him throughout the story, giving advice and help. He can be dueled at anytime.
- Darkmaster Bebuzzu is the main antagonist of the story. He once laid waste to almost the entire world and had been sealed inside the book. The seal was broken when Croma prompted Chocobo to open it and all nearby chocobos were sucked into the book. The seal weakened his powers considerably.
As with all Chocobo series games, the soundtrack uses music from other Final Fantasy series. These are all included as Disc 1 of the Chocobo to Mahou Ehon Series Original Soundtrack.
A sequel to the game has been released for the Nintendo DS, (チョコボと魔法の絵本 - 魔女と少女と五人の勇者, Chocobo to Mahō no Ehon - Majo to Shōjo to Gonin no Yūsha?, lit. "Chocobo's Magical Book - The Witch, The Girl and the Five Heroes").