In the vibrant summer of 1982, Sam Brenner (Adam Sandler) and Will Cooper (Kevin James), both thirteen years old, revel in their passion for arcade gaming at the local arcade. Their excitement peaks when Brenner decides to participate in a prestigious arcade game world championship. At the event, the Master of Ceremonies announces a thrilling twist: a time capsule is set to launch into space, containing a videotape featuring highlights from the championships. During the championship, they encounter Ludlow Lamonsoff (Josh Gad), a young boy infatuated with Lady Lisa, the heroine of the popular game Dojo Quest. Brenner initially sails through all challenges but ultimately falls short against Eddie Plant (Peter Dinklage) in a fierce showdown in Donkey Kong.
Fast forward to the present day, and Brenner is now a technician installing home theater systems, while Cooper has ascended the ranks to become the President of the United States. Chaos erupts when a U.S. military base in Guam comes under attack. The soldiers engage in combat but are swiftly overpowered, leading to the abduction of one soldier.
Brenner's life takes an unexpected turn when he is assigned to work in the home of Violet Van Patten (Michelle Monaghan), a divorcee living with her son Matty. Just as Brenner thinks he has a normal job, he receives a surprising call from Cooper. He learns that Violet is a Lieutenant Colonel, and they meet at the Oval Office to review footage of the base attack. Brenner notes that the assailants' tactics echo those used in the classic game Galaga.
As Brenner drives home, he is startled when Ludlow suddenly appears in his van. Ludlow reveals that aliens have descended upon Earth, dispatching creatures designed after classic video game characters to challenge humanity. He has deciphered a message hidden within manipulated footage that indicates these aliens perceive the championship tape as a declaration of war. They intend to claim Earth if they win three rounds. After sharing the video with Cooper, they learn that the next attack is set for India, but it's too late to prevent the assault on the Taj Mahal, where the aliens utilize Arkanoid paddles and abduct another victim.
Tasked with training soldiers to combat these extraterrestrial threats, Brenner and Ludlow partner with Violet, who helps them discover that strong light beams can neutralize the aliens' pixelated forms. The tension escalates as they prepare for the next onslaught in London, where the iconic Centipede looms ominously in the sky. Brenner, encouraging the soldiers to anticipate the extraterrestrial patterns, leads them in battle, but they initially struggle. Securing permission from Cooper, Brenner and Ludlow step in to turn the tide, defeating the threat. The aliens acknowledge their victory with a message, presenting them with the Duck Hunt dog as a trophy, while ominously reminding them that the score is currently 2-1 in favor of the aliens.
The next battlegrounds shift to New York City. With the stakes higher than ever, Brenner, Cooper, and Violet visit a prison to enlist Eddie's assistance. In a surprising turn of events, Cooper agrees to release Eddie in exchange for his help, despite his criminal past. The group soon discovers they must prevail against the formidable Pac-Man, needing to outsmart it three times. Violet provides them with Mini Coopers decorated to resemble the game's iconic ghosts, while the game's creator, Toru Iwatani, adds to their arsenal.
During the intense downtown encounter, Iwatani attempts to reach out to Pac-Man, only to suffer a harrowing injury when Pac-Man bites off his hand. In a twist of fate, Eddie manages to conquer Pac-Man in the first round, delighting everyone. However, during the second elimination, disaster strikes as Eddie’s car plunges into the East River. Brenner takes the reins for the final showdown, executing a daring maneuver that leads to Pac-Man's defeat, culminating in a trophy of QBert*.
The victory celebrations are short-lived, as the aliens soon accuse the team of cheating, leading to the disqualification of the planet's contest. It is revealed that Matty discovered Eddie's use of a speed cheat during the match, prompting Eddie to flee, leaving Matty vulnerable to abduction.
With urgency mounting in Washington, D.C., the aliens intensify their attacks. Brenner and the group push forward, while Ludlow remains behind to fend off the aliens, who are now employing a female warrior based on Lady Lisa. In a moment of vulnerability, Ludlow professes his feelings for Lady Lisa, resulting in a heartfelt kiss that stirs him on to continue the fight. Eddie also reenters the fray, and together they find themselves aboard the alien spaceship.
Faced with the imposing figure of Donkey Kong, who is bent on thwarting their rescue efforts, the group must act quickly to save their comrades. Brenner learns of Eddie’s deception just as Matty reveals the truth about him, prompting Brenner to throw a hammer at Donkey Kong, which ultimately shatters the alien's hold, restoring order. As a result, the classic video game characters are returned to Earth, including Lady Lisa.
In the aftermath, the team is celebrated as heroes, leading to a historic peace agreement with the alien visitors. In a humorous twist, QBert* unexpectedly transforms into Lady Lisa, bringing joy to Ludlow. Meanwhile, Brenner and Violet embark on a romantic relationship as Eddie receives surprising text messages from stars like Serena Williams and Martha Stewart.
Fast forward a year, and the narrative concludes with a heartwarming scene: Ludlow and Lady Lisa are now married with children, named QBy*, showcasing the joyous blending of their two worlds.
