A rhythm action game focusing on the use of a dance mat to successfully complete a dance pattern of arrows scrolling up the screen in time to music. The object of the game is to get as many arrows in the right order and at the right time to get a high score. The unique selling point of Dance Factory is that it will automatically create a dance pattern based on any music CD inserted into the PS2 console.
Dance Factory contains six different single-player game modes which are all variations around the main game mechanic which is to match patterns moving up the screen with the button presses or foot taps of the user all in time with a music track. Along with the basic game mode, there is an endurance mode which plays through an entire CDs worth of songs, a fitness mode which counts calories and a record mode that lets you create your own dance. There is also a 'creature' mode that makes a computer animated character dance along with the music on screen and an EyeToy mode that adds hand icons to the dance patterns that the player's onscreen camera image must hit in time to the music.
Dance Factory also includes a multiplayer mode that allows two players to dance simultaneously in a head to head battle or cooperatively to compete for higher scores. Multiplayer also features a tournament mode where up to 16 players can compete in a series of head to head battles to pick an eventual winner.