In Gotham City, a wealthy couple faced with disappointment over the birth of their deformed and ill-tempered son, Oswald, ultimately abandoned him in the sewers. There, he was discovered and raised by a colony of penguins. Fast forward thirty-three years to Christmas, industrial tycoon Max Shreck is abducted by the nefarious Red Triangle Gang—a group of former circus performers implicated in numerous child abduction cases across the country—and taken to their hideout in Gotham’s abandoned Arctic World exhibit. The gang’s leader, now known as the Penguin, blackmails Shreck by leveraging evidence of his corruption and murderous deeds, coercing him into aiding Penguin's reentry into Gotham’s high society.

Shreck devises a scheme to stage the kidnapping of the mayor’s baby, allowing Penguin to orchestrate a dramatic rescue and position himself as a public hero. In return, Penguin requests access to Gotham's birth records, ostensibly to uncover the identities of Gotham's firstborn citizens in order to learn his own true lineage.