The plot of Scars of the War revolves around USN soldier Walter Feng. When Huffman Island is deemed ready for colonization by the United Nations in 2065, Feng becomes one of the island's first immigrants. Living in Freedom City, Walter befriends two other children - Randy O'Neill and Glen Duval. The three boys experience first-hand the realities of war during the outbreak of the 1st Huffman Conflict in 2070; Walter and Glen are literally scarred by shell casings during a battle in Freedom City. The three boys were separated at the end of the war when the USN forcefully repatriates Walter and Randy, and Glen is forcefully repatriated by the OCU. The three reunites during a peacekeeping operation as soldiers for their respective armies during the Huffman Crisis in 2086. Upon seeing Glen pilot a wanzer, Walter and Randy sign up for the USN Army's wanzer training program. As tensions between the OCU and USN elevate to a new high from the Larcus Incident, the two men qualify as wanzer pilots.

However, on the same day they qualify, Walter and Randy are sent off to fight in the 2nd Huffman Conflict. During the invasion of Freedom City, they encounter Glen in the suburbs of city and defeat him. Feng and O'Neill visit Duval before he is shipped off to a POW camp. A year later, the three face off again on the battlefield - this time, Glen easily defeats his friends. However, instead of showing mercy, Glen kills Randy inside his cockpit block. A ceasefire between the OCU and the USN is declared shortly after he escapes. Traumatized by the experience, Walter cleans up Randy's quarters in an attempt to move on with life. Seeing an application form for the Strike Wyverns assault unit, Feng signs the form and undergoes intensive training. He passes the test and joins the unit, where he meets his old friend Edward Collins and new commanding officer Lynn Wenwright (who happens to be his childhood sweetheart).

Over the next few years, Walter participates in numerous military operations and begins to take an interest in the conflicts he gets involved with. From Zaftra's struggles involving natural resources to pro-independence movements in the OCU, Feng gets drawn into a global war between nationalism and globalization that has been on-going for decades. At the heart of this conflict is the Grimnir - a terrorist organization aimed at destabilizing the supranational unions and return to a world governed by nation-states.