Yokai are all around us and they take on many forms. Some are big and some are small, some are ancient and some are new, some are kind and some are very bad. But some kind spirits go bad when they absorbed with very negative energy towards us, and when that happens... disaster is not far behind.
But if you possess a Yo-kai watch, you'll have the ability to not only fight this disaster but also save and purify the spirit. But the Yo-kai Watch can only be given to those with a very special and rare gift: the gift to see the Yokai all around us. Twilight Sparkle and Flash Sentry are two of the ones who possess such a gift, but they don't know that they do.
That wasn't up until a new student transferred from Japan arrives during the Friendship Games. This boy also possess the gift and possesses a Yo-kai Watch, along with a couple of Yo-kai Crystals. Not only does these medals combined with the watch can summon a Yo-kai you befriended, but with a special one can do so much more.