On January 3, the demo release date was announced in the Jump Magazine. Studio Pierrot, the developer of the Naruto and Naruto: Shippūden anime series, aided CyberConnect2 in the making of new storylines to be featured in the game, resulting in new 60 minutes of created animation. Matsuyama also commented the story mode is different from Naruto Shippūden: Ultimate Ninja Storm 2, with Part II meant to have a different impact in the gamers.
The game is meant to satisfy the gamers' wishes and interests regarding the series according to Hiroshi Matsuyama, the president of CyberConnect2.
The term "Generations" was used, standing for "the ultimate ninja battle that crosses generations". Producer Yusuke Sasaki commented the staff wanted to give combat a greater focus than its prequels. The game's official website opened shortly afterwards. The initial gameplay was modified during November 2011 to further balance the fights. With the addition of these characters, the staff comments the game will have a wider variety of battles than the previous game. Naruto Shippūden: Ultimate Ninja Storm Generations was first announced by Namco Bandai Games in late June from 2011 in the manga magazine Weekly Shōnen Jump, promising the return of Part I characters, most notably Zabuza Momochi and Haku in response to their popularity within fans. Few characters appear assisting such as Fū and Torune who are teamed up with Danzō Shimura. With 72 playable characters and 15 supports, the game includes the debut of the new Kage introduced in Part II, as well as Kakashi Hatake's team during his childhood. New animated cutscenes will be used for the story mode. While the game covers both Part I and Part II, all of the characters created for the original episodes will be playable. Although it mainly focuses on Naruto Uzumaki's adventures, it features new sidestories lead by supporting characters such as Minato Namikaze and Itachi Uchiha that will expand their backgrounds. The role-playing game elements from Naruto Shippūden: Ultimate Ninja Storm 2's story mode were removed in favor of consecutive battles, thus reducing the time spent during the mode. The story mode is divided between both Part I and Part II from the series, respectively featuring the younger and older incarnations from the series' characters. Players will also be able to use real collectible cards to unlock new content and gain advantages in the fights. For example, Part II Naruto Uzumaki would change into his Nine-Tails Chakra Mode that enhances his abilities, while Part II Sasuke Uchiha would summon Susanoo, a massive ethereal warrior that aids him in combat. One of the new additions to the game is the "Beast Mode", also known as "Awakening Mode", in which a character transforms into a beast with stronger attacks should they be about to be defeated.
The game now implements a new status meter that limits the amount of substitution jutsu that can be performed. The battle system has been modified for faster gameplay. While carrying several elements previously seen in the prequels, such as playing the story mode and online tournaments, the game shows several new features and changes. Naruto, in his Nine-Tails Chakra Mode, as depicted in the game.