In the latest game, Mr. Lemoncello's game goes live on national TV! Kyle Keeley and his friends are playing his newest picture guessing game, What Else Do You See?, on a library computer when their old enemy from the very first breakout game, the stuck-up Charles Chiltington, tells on them to the librarian and gets them all detention, sticking Kyle with 5 of them. Later that day, Mr. Lemoncello, the famous game-maker, goes on TV, telling everyone about the new breakout game that he will be hosting live on the Kidzapalooza network. He also explains that the teams will be chosen in auditions at the Alexandriaville Middle School in Ohio, his hometown, where Kyle and his friends go to school.
Only one problem...Kyle has detentions to serve at the same time the auditions are taking place. He does the only thing he can do - he skips his final detention, earning him 5 more, and attends the audition. To get into the auditorium, teams of 5 must first pass a preliminary word scramble, which he, Akimi, Andrew, Miguel, and Sierra easily pass. Of course, Charles isn't one to be outdone, and at the advice of his rich, competitive, and oppressive father, he gathers a group of 8th graders known to be the biggest bookworms in school history. In the audition, his team, aptly named the Bookworms, take first place, while Kyle's Lemonheads take second. Both teams will be moving on to the real deal!
In a final attempt to undermine his adversary, Charles emails Kyle's parents, informing him of the detentions and the skipped detention, painting Kyle as badly as possible. Kyle almost gets grounded, but Akimi is able to explain why it happened and that Charles is a bad person, often insulting Kyle's father for working as a mechanic.
In the meantime, Mr. Lemoncello and his Imagination Factory have been madly working on their latest invention to be used in the breakout game - the Fictionasium. The immersive virtual reality simulation will enable participants to weave their own story in a genre of their choosing, be it fiction, nonfiction, history, anything, using a combination of motion capture suits and Smell-A-Vision. When the Bookworms and Lemonheads are brought in to train on the system, Mr. Lemoncello tells them that there will be a special third team joining them in the breakout race, to be revealed on the day of the competition.
The team is the Kidzapalooza All-Stars, a combination of the biggest young stars on the network, including Alexandriavill's own Haley Daley, who gained fame after being featured in commercials as a prize for being one of the winners of the first library breakout game.
When the contest begins, two things quickly become clear. First, that the All-Stars are indeed all-stars. They quickly took the lead and progressed through the Fictionasium room for each genre. Meanwhile, Charles's Bookworms were found to be indeed bookworms, and not gamers. He had failed to anticipate the interactive aspect of the Fictionasium, and one by one, his teammates resigned, leaving him all alone. Soon, he seems to have given up as well, disappearing for a hour.
In the meantime, the Lemonheads and the All-Stars work through their rooms, getting all the way to the fourth room, despite all sorts of surprises, while Charles remains AWOL. Then, all of a sudden, Chiltington reappears and works his way through the rooms at breakneck speed, looking like he already knew the answers - because he did. He had found his way into the Fictionasium control room while the guard was in the bathroom, attempted and failed to sabotage the others, then found all the answers before resuming the competition. He is onto his final room, the mythology room, where he discovers that a lightning blaster meant to resemble Zeus's lightning bolts is a bonafide laser blaster! With it, he resolves to take down the entire library, which he and his mother believe to be dangerous and bad for the city.
In another room, the All-Stars and Lemonheads must collaborate to complete their final room - realistic fiction. And Kyle gets an experience that changes his entire mindset. In it, he plays the part of Charles Chiltington under the name Miles Millerson. When he meets Mr. Millerson, modeled after Mr. Chiltington, he understands why Charles is the way he is. His father is an oppressive man, focused solely on winning, and spares no one from his wrath - not even his son. Mr. Millerson gives him two keys - the two keys that the teams need to open their boxes with the final clue - and tells him to use one for himself and forget the other. Instead, he shares the keys and the two teams race off to stop Charles from destroying the library.
Kyle decides that the best way is to show him a version of Mr. Millerson who tells him to reconsider his actions. But once Charles is prevented from destroying the library, he tries to win the competition, resulting in a three-way tie playing the game, What Else Do You See?, where the Lemonheads prevail.
