The issue is not the story itself but the lack of structure with such a short film. Had this been the start of a series than perhaps it would make more sense as you would expect to get the rest of the information needed to answer the many questions you are left with in the end throughout the series.
Kakurenbo: Hide and Seek is a story of a young boy who is looking for his sister who went missing playing a game of demonic hide and seek. Why are children playing this game at night and where are their parents? What is the motivation to play it in the first place? For three of the children it was the adventure, for one other it was the need to find his sibling, however, what about the other three? You are not told this nor are you told why children knowingly go and play after hearing of all the children that have gone missing before them.
The ending was not much of a surprise but the very last images in the last scene left you thinking a new game had started. There is no explanation as to why it was starting over nor what happened to the winner that passes on the mask. Did she get to go home? What saves this movie is the beautiful graphics. The story is well told, what there is of one, and it does have a haunting feeling of a story that would be told by a campfire or on Halloween.
I do recommend watching it for yourself but do not have expectations that you are getting a full story as it ends up feeling more like a clip from a full length film that never came to fruition.