The Aloof Warrior
Check out previous “reports” here.

As always, light spoilers ahead!
The episode begins with Itsuki finding success in his role as student council president, getting stuff done. We’re introduced to Suzuki Aika, a new student just back from living abroad. Aika is curious about Itsuki and it gets weird.

Anime!
Itsuki shows Aika around the dorm of their boarding school, and we see a legendary SEGA character enshrined in the bathhouse.

With both Itsuki and Aika in the dorm, things continue to get weirder.
We then cut back to Game Stuff, including a pretty great breakdown of PSO2 combat strategies.

Itsuki’s growing confidence in the game has left him arrogant and oblivious of the fact that he kinda sucks at PSO2. Thankfully, he has friends to set him straight.
In the meantime, this is just a great shot:

After struggling with his failure within PSO2, Itsuki repays his debt and reconciles with SORO. This mini character arc is great- it totally justifies the real-life/in-game split approach the creators took to The Animation. Thinking of how actions within a video game affect people in their “real” lives is a fascinating and powerful topic, even through the show’s sometimes strange anime lens.

The “game” part of the episode wraps up with Itsuki and SORO checking out an in-game concert (something PSO2 players will be familiar with). Back in real life, Rina shares her reason for the student council documenting PSO2- the school wants it banned, and Rina wants to prove its merits (I’m hoping for some Footloose-esque plot beats here in future episodes).
In order to reach her goal, Rina enlists Aika to support Itsuki with his reports, ensuring that things are just going to get weirder.

You can watch Phantasy Star Online 2 The Animation on Crunchyroll or buy the Blu-ray set from Sentai, Right Stuf, or Amazon.