Noticing Lucy worrying over her lack of money, Mirajane suggests they do a simple job for a theater, making their performances more interesting using magic. But, upon reaching the theatre, they are informed that all the actors have ran away. Erza suggests that they perform in the play instead. Everybody warms up to the idea. Erza plays the heroic Prince Frederick, Lucy is the damsel-in-distress, Princess Yanderica, while Gray is the villainous Julius. Happy is given the task of carrying a Dragon suit that Natsu is in, playing Julius’ Draconic Servant, and they are given a week to rehearse. They are also given the task of distributing fliers. Their show is atrocious, makes little sense and, to top it all, Erza develops stage fright, yet is insistent in hogging the spotlight. They eventually destroy the theater, but despite all this, they are hailed as a success to the point that they’re kept there for another week, doing three performances a day. 
They go out on another job and chance upon Loke after swiftly completing it. Seeing how they completed it so quickly, they Town. Natsu, Erza and Gray have a pillow fight.  Back at the guild, an injured Gray argues with an equally injured Natsu about the outcome of the pillow fight, but neither is willing to admit defeat, so they ask Lucy to judge. An agitated Lucy silences Natsu and Gray’s bickering, a feat Warren and Max believe only Erza is capable of performing. 
Later, when Lucy goes back to her apartment, Gray suddenly barges in, saying that Loke had left Fairy Tail. After hearing this, Lucy and all the others go looking for him. 
Tower of Heaven arc
Shocked by the announcement that Loke is a Celestial Spirit, Lucy explains to Natsu, Gray and Happy that he is actually Leo the Lion, leader of the Zodiacs. Considering how he can no longer spend long periods of time in the human world, Loke gives the four of them, as well as Erza, a ticket to a fancy resort.  Juvia follows them and secretly spies on Gray. She then approaches Gray in the casino.  While chatting, they are attacked by Simon, a tall and ruthless Mage who specializes in Darkness Magic, who asks them for Erza’s whereabouts.  Gray is able to escape the ambush with Juvia’s help, by hiding inside her water body. 
With Erza and Happy kidnapped, the team, plus Juvia, decides to rescue them, using Natsu’s exceptional olfactory senses to first track them down.  As they get to the island on which the Tower of Heaven stands, they find Erza and she explains her past to them.  After Erza finishes telling her story, Simon and Sho arrive and join the team to stop Jellal Fernandes.  When Jellal activates the Heaven’s Game, Sho traps Erza in one of his cards in order to protect her and runs off, wanting to fight Jellal himself. Simon leaves the group to follow Sho, leaving Gray, Juvia and Lucy to find Natsu.  But Gray goes after Sho, and entrusts to Lucy and Juvia the task of finding Natsu. 
Later, he runs into the Death’s Head Caucus Guild’s Trinity Raven member, Fukuro, who has started digesting Natsu and started using his flames on Simon and Happy; the two begin to battle.  Gray is able to withstand the heat of Natsu’s stolen fire attacks and is able to freeze the flames, though Gray comments that Natsu had a stronger fire. Soon, Fukuro tries to absorb him, but Gray manages to freeze him enough to make him withdraw.  In a fit of rage, he then uses Ice Blade: Seven Slice Dance to defeat Fukuro and free Natsu.  During the fight, Gray takes a fair amount of damage and Simon asks Happy to take him outside the tower to recover.  They flee the island on a boat along with Juvia, Lucy, Wally and Millianna, and watch as the weaponized satellite Etherion strikes the tower.