In the centuries following humanity's retreat underground following a devastating nuclear war, their lives follow a peaceful, albeit uninspired routine inside an underground habitat known as Layered. Layered was designed to support human existence underground, and is administered by a sophisticated artificial intelligence known as The Controller, which - true to its name - controls all aspects of human life. In the present day, odd behaviors by The Controller have led to unrest among the people, and the major factions of Layered.
- Mirage - The company grew from manufacturing industrial machines into the leading developer of Armored Core parts. They seek to gain direct access to The Controller in order to further their own agendas, but have been slow to act out of fear of reprisal by The Controller should their attempt fail. Mirage parts tend to focus toward energy weapon and machine gun performance, and are best suited to hit-and-run tactics.
- Crest - Mirage's main competitor, they grew out of their successes in bio-engineering. Unlike Mirage's attitude to The Controller, Crest believes that the current system is the best for humanity. It is unwaveringly loyal to The Controller and will carry out its orders without question. Their differences in attitudes makes Crest and Mirage arch-rivals from both a business and ideological standpoint. Crest AC parts are focused on durability for long battles, and tend to favor the use of heavy weapons such as bazookas and grenade launchers for prolonged, devastating combat.
- Kisaragi - They are the smallest of the three corporations, and thus try to avoid open confrontation with Crest and Mirage whenever possible, only intervening when the situation is clearly in their advantage. They are neither particularly pro or anti Controller, with their attitude best described as cautious. They grew out of computer manufacturing and, in addition to AC parts, are expanding into the field of bio-engineering, with an apparent affinity for bio-weapon research. They do not offer a Core part, with their AC part lineup specializing in powerful support parts.
- Union - A rebel group that has grown in vehement opposition to The Controller's uncontested rule of Layered. Growing in popularity when the game begins due to the erratic actions of The Controller, Union has gone so far as to claim that The Controller is malfunctioning and must be removed. This stance puts them in direct opposition with Crest, who seeks to eliminate their forces at every opportunity.
- Global Cortex - An organization acts as an intermediary between the Corporations and mercenary AC pilots known as Ravens. Their services are mainly the use of their private network to link up Ravens with their corporate clients, as well as serving as a marketplace for AC parts and providing post-mission repairs and ammo replenishment. Global Cortex is fiercely independent, and places no restriction upon the Ravens' work.
The game unfolds in much the same way as previous Armored Core titles, with the player, as a Raven working for Global Cortex, taking on assignments for the other factions and watching events unfold through his or her perspective.
In addition, Global Cortex runs an arena, offering rewards for Ravens who move up in the ranks, with the main goal to become the top Raven in the Arena. Due to the entertainment value of the Arena, Global Cortex offers free repairs and resupply after arena matches (Ravens are charged for these services after missions), so Ravens don't have to hold back, making for more exciting matches.
Armored Core 3 introduces several new features to the Armored Core format. The first is the ability to hire wingmen for selected missions, known in the game as Consorts. Missions that are considerably harder than most single Ravens can handle will have the option to hire additional help for a price. Depending on the mission, a Raven may be limited to MT pilots or have his pick of the finest Ravens that Global Cortex has to offer. In some missions, the client will have a Consort arranged, which cannot be undone. In most cases, however, these missions compel the Raven to choose between the added reward potential of going it alone versus the reduction of burden that comes from hiring a Consort.
Also introduced to Armored Core 3 is the Exceed Orbit. Some cores are built with Exceed Orbit pods instead of over boost functionality, giving the player additional automated firepower ranging from machine guns to devastating laser weapons. Like all other weapons in the game, the amount of ammo available to Exceed Orbit pods is limited, and should be used judiciously. Conversely, however, some cores are built without either Exceed Orbit or Over Boost function, but may offer stat edges to compensate for the lack of these functions, adding to the depth of AC creation.
Armored Core 3 is also the first game to allow the use to purge weapons. Should a weapon run out of ammo, it can be dumped in order to reduce weight and increase mobility, which will be critical when the Raven is left with only a blade as a functional weapon.