In the previous two games, combat was simply a matter of attacking a foe standing in front of you, but Ultima III moves all battles to a separate, tactical combat map. Now you must carefully consider the position and movement of all your characters, greatly expanding your options in combat. On top of this, the game also adds new character races, classes and different spell groups for Wizards and Clerics.

Outside combat, the game is also much tighter. The space battles and most sci-fi elements of Ultima I and II were removed, and talking to NPCs is more important now, as conversation trees were added. The game also packs a twist, with a final encounter that requires more puzzle-solving than combat.

Although a cloth map was once again included with the game box, a new continent that could be found off the map was made available, adding a sense of wonder. The same could be said for a secret spell that was not included in the manual and required puzzle-solving and exploration to discover. The time gates of Ultima II were back, now officially called Moongates, and would allow travel dependent on phases of the planet's twin moons.

Garriott felt that allowing the character to be able to interact with his or her surroundings was vital to the CRPG experience, so he sought to improve upon the things that one could do. Players could pick up more objects and manipulate them on the screen, allowing for further puzzle design and problem-solving.

Of course, all of these improvements would be the result of brand-new programming code. Garriott had left Sierra On-Line after Ultima II was published, claiming that they stopped paying him his royalties, and started his own game company – Origin Systems. If his fledgling creation was to survive, then Ultima III would have to be a hit.