Most of the game takes place in two galaxies: Small Magellanic Cloud and the Large Magellanic Cloud.
In the first part of the game, taking place in the SMC, Yuri becomes aware of the Lugovalian Empire,
a very large and powerful intergalactic empire, ruled by an iron fist by Emperor Taranis.
Learning of their desire to conquer the SMC, Yuri tries to coordinate the galaxy's forces for a defense,
 but they quickly fall to the Lugovalian threat. In the second part of the game, taking place 10 years later,
most of the SMC is under Lugovalian control, with a plan to also conquer the Galactic Federation of the LMC:
the largest military force in the galaxy.