Armored Core: Project Phantasma é uma expansão independente para o Armored Core original, lançado para o PlayStation em 1997. Ele se concentra no combate baseado em arena, introduzindo batalhas individuais classificadas contra pilotos rivais. Os jogadores personalizam um mech humanóide usando peças intercambiáveis que afetam a mobilidade, o poder de fogo e o uso de energia. O jogo coloca menos ênfase na variedade de missões e mais na otimização mecânica e na habilidade de combate. Sua estrutura e mecânica ajudaram a definir elementos competitivos que se tornaram centrais para as entradas posteriores da série.

The Raven (protagonist) receives an unusual request. The cryptic message tells the player to infiltrate a mysterious underground complex called Amber Crown with a promise of an extremely lucrative monetary reward. Once in Amber Crown, the player encounters Sumika Juutilainen, an escapee from the enigmatic Doomsday Organization (Wednesday Organization in Japan), the shadow group that has been operating in the complex. Sumika becomes the player's primary client and partner during the mission in Amber Crown. As the player completes more missions, he develops a rivalry with an Armored Core pilot named Stinger, who is in the employ of the Doomsday Organization. Stinger becomes a more dangerous presence as the mystery in Amber Crown is uncovered, culminating in the revelation of Project Phantasma. A top-secret development project by the Doomsday Organization, Project Phantasma is a weapon system that would tip the balance of power. Sumika and Stinger were test subjects for the project. Stinger, desiring the strength of the Phantasma weapon, attempts to use it against the player. The player's continued success drives Stinger to merge with Phantasma and challenge the player to a final fight. The player defeats Stinger and destroys the Phantasma project, leading to the dissolution of the Doomsday Organization.