Magic Gem is a casual video game wherein the player has to grab gems on the screen and throw them at gems of the same color. This removes the gems on the game screen. There are different colored gems in the game. They are stacked up directly above the player's character. New gems are added after every few seconds. To remove the gems on the screen, the player has to grab the gems and throw them at similar colored gems that are on a different line. The player can continually pull similar colored gems and then throw all of them together. The player wins when he clears the topmost portion of the game screen. The player loses when the gems get stacked up and reaches the top of the screen.
The player can make use of three main game modes. The player can play against a computer-controlled unit in "vs CPU" mode. In "vs CPU" mode, the game screen is split on the center. The left side is the player's screen while the right side is the opponent's screen. The player plays a single-player game on "single" mode. The player can also compete against another player in "human" mode. The game also has a "help" menu. This assists the player in becoming familiarized with the game's controls. The game can be played straight from the web browser.