Ninja Gaiden 3 is the first main entry in the modern Ninja Gaiden series not to be directed by former Team Ninja head Tomonobu Itagaki. NG3 features new game mechanics, a focus on consequence and 8-player online modes.

Ryu is called upon by the Japanese Self-Defense Force to deal with a terrorist group led by the mysterious alchemist, the Regent of the Mask, who personally wanted the Dragon Ninja to come. Upon encountering the alchemist at the Prime Minister's residence in London, he curses Ryu's right arm with the Grip of Murder which thrives on all the lives Ryu has taken, causing the Dragon Sword to be absorbed into Ryu's arm. Later, Ryu and JSDF member Mizuki McCloud watch as the Regent demands the immediate surrender by the nations of the world in seven days, or face annihilation.