Magic Lanterns has four modes and an online community. All of these modes, sans the online aspect, have the same gameplay experience. All of these modes present a board filled with paper lanterns; your job is to collect as many points in a limited number of moves. You earn points by clicking on groups of colored lanterns. The more like-colored lanterns you clear in a turn, the more points you get. As you progress, various power ups appear. These are blocks that change the colors of the lanterns around them to a particular color, blocks that destroy whole columns or rows, and blocks that change all of the adjacent lanterns to random colors.
Lantern Quest takes you through a series of levels that take you across Japan. Basically, you just go from level to level earning as many points as possible. Perfect Mode is like Lantern Quest except you can choose which levels you want to play and in which order.
Panic Mode works a lot like Hexic's Time Trial mode. Here you have a time limit bar that is always falling. Clearing lanterns staves the drop, and if you clear enough lanterns in a move, you can actually increase your time limit. Puzzle Mode is your standard "clear the board" mode where the lanterns are laid out in a very specific pattern and no new ones fall from the top as you clear them. So your goal is to try and clear them all. If even one lantern is left on the board when you can't make any more moves, then you have to start over.
That's all of Magic Lanterns' play modes - the other aspect of this game is its Online Community. When you go online, you can edit and share your own level designs. While online, you can download other gamers’ level packs and play them right there.