Punishing: Gray Raven is a story in the future. The "Fusion Technology" lead human into a speedy development golden era. However, due to human's ultimate exploration of basic science and the exposion of the taboo, the virus representing punishing, the "Palmis" virus, was exploded.

The story of the game takes place in a post-apocalyptic world overrun by Corrupted cybernetic enemies caused by the "Punishing Virus. The last remnants and survivors of mankind have escaped to the space station and stronghold Babylonia. The player takes on the role as the Commandant of an elite squad of Constructs known as Gray Raven. The player will lead the squad to fight against the Corrupted and other opposing forces to retake the planet.