A City Sleeps is a 2D side-scrolling twin-stick shooter that synchronizes the soundtrack with the gameplay elements. The game is about a clan of dream exorcists that enter the dreams of sleeping host to cleanse their dreams of demons called Kami. In the city of SanLo all residents fall asleep and Poe, the youngest member of The Silk clan, needs to help them.
Poe can both move and shoot in any direction as the screen scrolls forward, often halting at certain parts until all Kami enemies are defeated. She attacks with a Koto sword called Heartstrings that fires bullets. When enemies get close she is able to slash with a melee attack. Enemies also attack with many bullets at once, creating 'bullet hull' situations where careful maneuvering is required to dodge. Only the core, a small green dot, is vulnerable, bullets pass through other parts of her body. The melee attack frees energy that is absorbed, filling a red meter. When it is full a giant sword can be summoned that can attack in any direction and does a lot of damage. She is also able to dash away.
Giant objects called idols often appear in the environment. There are two types, a slow one and a fast one. Poe can place a ghost in an idol socket with her sword from anywhere on the screen to receive the help from ghosts. Mercy ghost for instance provides health, while Anger helps to attack. The type of ghost is different for each idol. For instance when Mercy is placed in a slow idol it will send out an absolution wave Poe needs to be close to to absorb health (proximity), while in a fast one small health packets are sent all around the screen (projectile). When players assign ghosts the gameplay slows down to a crawl.
The game synchronizes audio to the gameplay. Poe's bullets for instance add a layer to the soundtrack when she starts shooting. There is no beat matching required, but enemy spawns, projectiles, movement, bullet patterns and level design match the soundtrack and can be used to anticipate. The game consists of three dreams (levels), split up in three parts each with a boss, that can be played in variations of five difficulty levels. Four more ghosts can be unlocked eventually and up to three can be equipped before starting a level. The Master ghost for instance comes with a relic that does a lot of damage based on risky screen positioning relative to the possessed idol.