The movie opens with SMG3 and Meggy are horrified to see SMG4 completely insane, screaming “IT’S GOTTA BE PERFECT!” over and over as a strange black material filled with white glyphs spills out and onto the back wall. Then, we see a flashback from a POV of SMG4 from the last month begins about what happened before. A few weeks ago, after SMG4 got un-cancelled on YouTube with the help of SMG3, he began producing the perfect video, and in the process began turned down going with Mario and Tari on the trip to Texas, driving Mario out when he asked him to come to MAR10 Day, and locking down his room to avoid distractions. His sanity and mood deteriorated with each failure until it came to a head during MAR10 DAY, where the noise and ruckus caused by Wario's hostile takeover knocked the internet router out of place and caused him to violently attack and kick out everyone from the castle in a rage, thus unintentionally ruining the party. Upon returning, SMG4 suddenly saw an adware pop-up for an advertisement for a "COMPLETELY REGULAR KEYBOARD THAT LOOKS COOOOOL," promoted by a then-unkown TV persona with the design of a TV set, who guaranteed it would improve a user's work perfect. SMG4 desperately ordered it, and upon delivery, immediately began using the keyboard and was able to crank out work like never before, at the cost of the keyboard's sinister power possessing him. In the present day, kicking off from the previous announcement, SMG3 walks upstairs and decides to confront SMG4, with Meggy tagging along to dissuade him. Despite her advice, SMG3 and a reluctant Meggy enter the room, only to find it filled with junk and unsettling writings. As they watch him type at his computer, silent, SMG3 walks up to SMG4 despite Meggy's objections and asks him to stop. However, just as he is about to touch the YouTuber, the environment around them distorts as an unknown anomaly emerges out from the unknown. It becomes apparent that he lost control of his body and is now controlled by the Demonic Goop. The Demonic Goop (SMG4) attempts to sacrifice SMG3 and Meggy for the sake of his video, with him manifesting black liquid goop for them to drown in, but they manage to escape out the window. The fleshy textures from the keyboard begin to infect Peach's Castle. Outside, Mario, Luigi, Bob, Fishy Boopkins, Tari, and Saiko arrive to cheer SMG4 up, but only to find the castle which is now corrupted by the goop. Despite Meggy's protests, Boopkins tries to get inside but is attacked by the demonic goop, forcing the others to battle against it to try and gain entry. While the cast is successfully holding their own, Mario, SMG3, and Meggy are smacked back into the castle and become trapped inside after the goop grows over the front door. The trio decides to search for SMG4 and, upon entering his computer room, they find SMG4's message on his computer that says "I just want to make everyone happy…" (Continued Down)
The goop begins to spread throughout the room, forcing them back into the lobby where they encounter a corrupted Toad, that attacks them made from SMG4's redesign experiments. Meanwhile, The Mushroom Kingdom Army, led by Swag and Chris, arrives to destroy the infected castle and stop the goop from spreading. But the crew members won't let the army through because Mario, Meggy, and SMG4 are still inside. Boopkins tries to reason with the goop, believing that love and friendship can fix the problem, but his efforts are in vain. As Meggy, Mario, and SMG3 ascend the stairs in pursuit of SMG4, they encounter unsettling messages written on the walls, reflecting SMG4's inner turmoil and self-doubt. SMG3 reveals his empathy for SMG4's struggles, sharing his own experience with the pressure of maintaining a YouTube channel as he comes to regret his previous actions over the years, especially from the Youtube Arc. Despite his initial reluctance, Meggy offers support and understanding, leading to a moment of unexpected camaraderie between them. Meanwhile, Mario leads the charge into a room where they find a manifestation of SMG4's old design, hinting at his desire to revert to a previous version of himself. Their exploration takes a sinister turn when SMG4's old design pulls SMG3 into a mysterious blue void, prompting Meggy and Mario to desperately try to rescue him. As tension mounts, they realize the urgency of finding SMG4 before it's too late. As Mario and Meggy confront Beeg SMG4, they're forced to watch and react to meme videos to progress further. After a series of failed attempts, Mario finally breaks the screen with laughter, allowing them to advance. They reach the third floor where they find SMG4’s physical body, completely absorbed in creating his perfect video and seemingly zombified. When they try to reach out to him, they're pushed back by a monstrous form of SMG3, deformed and pleading for help. A battle ensues, with Mario and Meggy fighting the Demonic Gopp until they manage to defeat it, revealing SMG3 in its place. As they try to rescue SMG4, they're engulfed by a void, leaving them in a desperate situation. As the trio continues to fight the anomaly on the third floor, SMG3 shares heartfelt words with SMG4, expressing understanding and support. Meggy and Mario also reassure SMG4 of their friendship and loyalty. Suddenly, SMG4 regains control and frees himself from the Demonic Goop, rescuing his friends. They share emotional reunions before realizing that the goop is still present. As they attempt to escape, a tentacle grabs SMG4 and pulls him back, prompting SMG3 to run after him, determined to help. As the battle rages on, Saiko reluctantly gives the signal for the others to drop bombs on the monster. With coordinated effort, they succeed in making the creature sink into the abyss, but unfortunately, the castle is also pulled down with it, but Mario and Meggy escape from it in time, and they all come to the realization that SMG4 and SMG3 are still trapped within the sinking castle. Back inside, SMG4 and SMG3 are trapped as the structure collapses around them. Despite the danger, SMG4 remains focused on completing his video, believing it to be his destiny. However, SMG3 refuses to abandon him and insists on helping finish the project. With SMG3's support, they work together to complete the video just as the castle sinks into the abyss below. Outside, the gang watches in sadness as they witness the destruction of their home and the possible loss of their friends. Meggy cries out in disbelief, refusing to accept that this could be the end. Meanwhile, inside the crumbling castle, SMG4 and SMG3 finish the video just as the USB drive glows and the keyboard disables itself. As they attempt to escape, they find themselves hanging onto the crumbling walls, facing imminent danger. As the USB drive slips from SMG4's grasp, SMG3 encourages him to let it go and in a moment of vulnerability, SMG3 expresses his concern for SMG4's safety and acknowledges their newfound friendship, a significant moment of growth for both of them, as of result SMG4 propels him and SMG3 out of the crater, demonstrating his commitment to their friendship. After heartfelt reunions, the entire crew mourns for the loss of their home as the entity completely devoured the castle, leaving an enormous hole that is beyond repair. Mario thinks that they can fix it together because the castle always gets fixed the next day, but Meggy somberly states that the castle won't be returning anytime soon, meaning it will not be this time. SMG4 expresses his regret, and apologizes for causing the destruction but resolves to make things right by building a new castle together. They share ideas for the new castle's design and set off to begin the rebuilding process, filled with hope for the future.
