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The Ghost Kraken is a giant, robotic octopus. It is purple with a yellow jewel and stripes around its body, white ones on its legs and rest being gray. It also has glowing green eyes. Its color scheme changes each time it is hit.
After Sonic encounters Captain Whisker and meets Blaze again, Captain Whisker sends the Ghost Kraken on the two to destroy them.
The battle with the Ghost Kraken take place on a circular plane. During the fight, the Ghost Kraken attacks mostly with its tentacles. The normal tentacles can be hit, causing no damage, but there is one jewel-like tentacle, which is its weak spot. Hitting the other tentacles will only make the Ghost Kraken mad quickly. At times, it will also launch globs of ink which will temporarily stun Sonic or Blaze and it will slam its tentacles down on those areas as well.
As the fight progresses, the Ghost Kraken will start to grow enraged and will submerge the platform underwater. While underwater, the rest of the platform is blocked off and the player can't jump over the tentacles. Also, it may spray a jet of ink to cloud the player's vision, and it will send the tentacles in waves. At that time is the chance to hit its weak spot. At the end of the fight, the Ghost Kraken will fire a glob of ink directly at the screen, almost clouding a large area of the player's view. The Kraken will then bring all its tentacles out and the player has to hit the tentacle with the crystal to finally defeat it. The ink can be wiped away by rubbing the stylus on the Touch Screen, but this method takes longer.