Set in 1986, the story follows Meredith Weiss, a software developer who spends two weeks in her hometown of Providence Oaks, Oregon, where she temporarily assumes the role of the town's mail carrier.

[5] In these interactions, the player can choose to complete additional tasks throughout the town and organize after-work or weekend activities with other townspeople, including romantic relationships.

Alternatively, the player can choose to complete additional work for Meredith's employer in the evenings or relax by reading or watching television or a movie.

[3] Branching dialogue choices are occasionally presented during conversations,[6] which may influence the nature and tone of Meredith's relationships and ultimately impact the ending.

Meredith may establish a romantic relationship with one of two love interests: Angie Eastman, the owner of a VHS rental shop; and Robert Harris, a lumberjack and environmental activist.

[7] By the game's end, the player must decide whether Meredith will stay in Providence Oaks and take over her father's position permanently, or accept a partnership offer from her boss Steve Mitchell in the software company and return to her life in the big city.

[4] Several characters were physically based on blends of famous actors, such as George Carlin, Bill Murray, Hailee Steinfeld, and Betty White.

[10]: 5:38  Bouman cited American sitcoms Cheers, Northern Exposure, and Seinfeld as inspirations for their balance between comedy and personal stories.

[4] The team wanted to present Lake as a laid-back, relaxing video game experience with a sincere and mature narrative; Bouman called it "anti-GTA" due to its lack of confrontation or stakes.

[1][9] The team found a modern setting would not justify regular meetups with friends due to the prevalence of social media messaging.

[1][14] The states of Idaho, Montana, and Wyoming were considered,[16] but Oregon was ultimately chosen for its aesthetics; Nagel had lived in Beaverton for 18 months in the early 2000s.

Technical environment artist Jonathan van Immerzeel performed extensive research through Google Maps and books about trees in the region.

[17] A trailer was shown during the Guerrilla Collective in June 2020, carrying a Q4 2020 release date; Bouman predicted a delay due to the amount of work involved.

[21] The game was originally refused classification on Xbox in Australia due to a scene involving drug use following submission through the International Age Rating Coalition, preventing its sale.

[29] In June 2023, Gamious announced a downloadable content expansion, Season's Greetings, set nine months before the main story, following Meredith's father Thomas at Christmas.

[12] Adventure Gamers's Peter Mattsson found the gameplay "ideal for anyone who just needs an opportunity to catch their breath", comparing it to his experiences with country driving.

[3] Some reviewers considered the experience relaxing, but felt it became too repetitive, particularly due to Meredith's slow movement;[6][40] Push Square's Liam Croft wrote it was "too shallow from start to finish".

[6] NME's Hirun Cryer praised the "brilliant branching narrative pathways",[41] and Eurogamer's Emad Ahmed wanted more character interactions.

[2] Push Square's Croft considered the story an effective palate cleanser in contrast to "heavier" games, though found its simplicity limited its potential.

[42] Adventure Gamers's Mattsson considered the narrative "memorable, delightful, and at times profound" and praised its impartiality regarding Meredith's final decision.

[40] Eurogamer's Ahmed considered Meredith "one of the most memorable, fully-fleshed out video game characters" of the year and found himself "unusually invested" in the lives of the community.

[6] The Guardian's Keza MacDonald lauded the effort put into creating the world, describing it as "a good-looking place to drive around for a few hours".