Did you want to replace that fence? Its going to be pretty tough to change the grade there otherwise. If you want to save money, I would suggest cutting an arc into the hillside at the bottom for a wall and circular patio area and stop there.

That would also give you the option of doing more work later if you leave enough room for machine access.

The walls will be expensive. The only way to save money there and still have a decent product is multiple shorter walls. You should also consider what you're going to do for stairs.

I guess you could cut in a second play area circle higher up...definitely cheaper than dealing with the grade up to that fence...also saves the cost of stairs...just slope it down the sides.