[3] Alan Wake 2 incorporates detective elements: when playing as Saga, players can access an enemy-free space dubbed the "Mind Place".

FBI Special Agent Saga Anderson and her partner Alex Casey are dispatched to the town of Bright Falls to investigate a series of ritualistic murders performed by a group calling themselves the Cult of the Tree.

She then finds Alan Wake washed up on the shore of Cauldron Lake, warning of a man named Mr. Scratch who shares his face.

He also made occasional contact with Saga through Overlaps and found video diaries from his wife Alice, documenting her experiences being haunted by a man with Alan's face.

Eventually, Alan writes Return, which details the events of Saga's investigation into the Cult of the Tree, but finds that it has been edited, presumably by Mr. Scratch, into a horror story.

Saga tracks down Odin and Tor Anderson, who she learns are actually her grand-uncle and grandfather, respectively, and passed on their seer abilities to her, allowing her to discern the changes to reality Return is causing.

A grieving Ilmo explains that the Cult's purpose was to protect Bright Falls from the Taken (people possessed by the Dark Presence) that emerge from the lake.

Saga enlists the help of Casey, Estevez, Odin, and Tor to summon the real Alan out of the Dark Place using the Clicker and a new song from the Old Gods of Asgard.

Alan returns to Bright Falls to find it has begun turning into a nightmarish version of his own egotistical desire for praise.

Door, implied to be her father, and Alice Wake, learns to navigate the Dark Place, retrieving the Clicker and a Bullet of Light, and reuniting with Alan to help him write an ending to save Casey and Logan.

As Casey recovers from his possession, Saga calls Logan to see if the ending worked, but the scene cuts to black while the phone rings and the credits roll.

Realizing that he and Alice are still connected through his writing and her photos, the Bullet of Light finally succeeds and destroys the Dark Presence for good, breaking the loop.

Learning from Max Payne, they wrote Alan Wake in a way that allows additional story to be told through sequels and further installments.

The game would have been a direct sequel to Alan Wake, featuring new enemies and new gameplay mechanics, such as being able to rewrite reality, which were showcased in the prototype.

It features two FBI agents, one named Alex Casey, investigating the reappearance of Wake, which had been created by Remedy as to help promote a sequel to publishers.

[10] Despite that, Lake continued to be part of a team in Remedy to brainstorm ideas and work on different incarnations for Alan Wake 2.

[11] In the second downloadable content pack for Control, Remedy's next game following Quantum Break, Alan Wake was featured as a character.

[12] Remedy fully acquired the rights to Alan Wake from Microsoft in July 2019, including a one-time royalty payment of about €2.5 million for the game series' past sales, which helped pave the way for a sequel.

[22] Remedy confirmed the game would remain in the third-person perspective despite the switch to survival horror, and that both Ilkka Villi and Matthew Porretta would return to provide the appearance and the voice of Alan, respectively.

[27] The song was played live at The Game Awards 2023 by Poets of the Fall, along with Villi, Porretta, Harewood, and Lake reprising their roles.

In an interview, Sam Lake said this was because "The sequel contains many characters and locations, as well as a continuation of the supernatural lore established and introduced in the original Alan Wake.

[31] In October 2024, Remedy Entertainment released the free anniversary update for Alan Wake 2, adding accessibility options like infinite ammo, one-shot kills, and gameplay assists.

The update added DualSense motion control support and enhanced haptic feedback on PlayStation 5, along with expanded axis inversion options.

The use of ray tracing is particularly important for adding ambience to dark scenes in the game that feature flashlights as a sole light source.

[50] Free downloadable content packs and two paid expansions titled Night Springs and The Lake House were announced.

[54] From 10 October to 13 November 2023, a free copy of Alan Wake 2 was included in a promotional bundle with the purchase of certain Nvidia GeForce RTX 40 series GPUs.

[52] It contains three episodes, featuring echoes of existing characters in the Remedy shared universe in "what if" type scenarios within Bright Falls.

These include "Number One Fan," with the player controlling the Waitress, who is based on Rose; the second is "North Star," which features a protagonist based on Jesse Faden, the main character of Control; the third is "Time Breaker," which features the Actor, real-life actor Shawn Ashmore appearing as himself as well as Sheriff Tim Breaker (whom Ashmore also voices).

[86] In the quarterly earnings report on 1 November 2024, the company announced that while the game has not yet started generating royalties, it is close to fully recouping most of the development and marketing costs with ongoing sales.

[88] By the end of 2024, it had sold over 2 million units, and started generating royalties for Remedy because development and marketing costs had been recouped.