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The story begins with Yggdrasil, a popular online game which is quietly shut down one day; however, the protagonist Momonga decides to not log out. Momonga is then transformed into the image of a skeleton as "the most powerful wizard.

When a great demon fox attacked Hidden Leaf Village, a powerful man known as the 4th Hokage had sealed the demon inside a newborn named Naruto, who then grew up detested by his fellow Leaf villagers. As a child, Naruto is isolated from the Konoha community, who regards him as if he was the Nine-Tails.

In the year 2022, the gaming industry has reached a new height after the development of the NerveGear, a helmet-like controller that allows the user to fully dive their senses into the world of virtual reality. After a closed beta with only 1,000 testers, the Virtual Reality MMORPG Sword Art Online is launched.