Assuming the role of a nameless security hacker, the player attempts to hinder the plans of a malevolent artificial intelligence called SHODAN.

[3] The game is set inside a large, multi-level space station, in which players explore, combat enemies and solve puzzles.

[5] As in Ultima Underworld,[6] the player uses a freely movable mouse cursor to aim weapons, to interact with objects and to manipulate the heads-up display (HUD) interface.

Practical uses for these actions include taking cover, retrieving items from beneath the player character and navigating small passages, respectively.

[7] Outside of Cyberspace, the player uses the game's sixteen weapons, of which a maximum of seven may be carried at one time, to combat robots, cyborgs and mutants controlled by SHODAN.

Projectile weapons often have selectable ammunition types with varying effects; for example, the "dart pistol" may fire either explosive needles or tranquilizers.

Dermal patches provide the character with beneficial effects—such as regeneration or increased melee attack power—but can cause detrimental side-effects, such as fatigue and distorted color perception.

Diego offers to drop all charges against the hacker in exchange for a confidential hacking of SHODAN, the artificial intelligence that controls the station.

Diego secretly plans to steal an experimental mutagenic virus being tested on Citadel Station and to sell it on the black market as a biological weapon.

[11] After hacking SHODAN, removing the AI's ethical constraints, and handing control over to Diego, the protagonist undergoes surgery to implant the promised neural interface.

Rebecca Lansing, a TriOptimum counter-terrorism consultant, contacts the player and claims that Citadel Station's mining laser is being powered up to attack Earth.

[13] Rebecca says that a certain crew member knows how to deactivate the laser and promises to destroy the records of the hacker's incriminating exchange with Diego if the strike is stopped.

Foiled by the hacker's work, SHODAN prepares to seed Earth with the virus that Diego planned to steal—the same one responsible for turning the station's crew into mutants.

System Shock was first conceived during the final stages of Ultima Underworld II: Labyrinth of Worlds' development, between December 1992 and January 1993.

[5] According to Church, the team believed that they had made "too many dungeon games";[3] and Neurath later explained that they were experiencing burnout after the rushed development of Ultima Underworld II.

[10] Grossman built on ideas that he first explored while writing and designing Ultima Underworld II's tomb dimension, which he later called a "mini-prototype" for System Shock.

[5][9] To eliminate dialogue trees from System Shock, the team prevented the player from ever meeting a living non-player character (NPC): the plot is instead conveyed by e-mail messages and log discs, many of which were recorded by dead NPCs.

Here, Grossman took influence from Edgar Lee Masters' Spoon River Anthology, a collection of poems written as the epitaphs of fictional individuals.

"[10] The removal of conversations was an attempt by the team to make the game a more "integrated whole" than was Ultima Underworld--one with a greater focus on immersion, atmosphere and "the feeling of 'being there'".

[3] Church said that the team's ultimate goal was to create a "rich, exciting, active environment" in which the player could be immersed,[3] and that this required "a coherent story and a world that you can interact with as much as possible.

[5] System Shock concept artist Robb Waters created SHODAN's visual design,[30][31] and LoPiccolo recruited his bandmate Terri Brosius to voice the character.

[3] The system governs, among other things, weapon recoil and the arc of thrown objects; the latter behave differently based on their weight and velocity.

[33] According to Church, Looking Glass' internal management largely ignored System Shock, in favor of the concurrently-developed Flight Unlimited—the game "that had to be the hit, because it was the self-published title".

[27] Each track was "written at three different intensity levels", which change depending on the player's nearness to enemies; and certain events, such as victory in combat, trigger special music.

[26][28] He later recalled visiting an automobile repair shop with "portable recorder and a mic", and "having [his] mechanic [...] hit things with wrenches and so forth, just to get the raw material".

The enhanced CD-ROM was released in December 1994, which featured full speech for logs and e-mails, multiple display resolutions, and more detailed graphics.

With Deus Ex, developer Warren Spector revealed a desire to "build on the foundation laid by the Looking Glass guys in games like ... System Shock".

[74] While OtherSide initially stated that it was still working on the project, they later announced in May 2020, via Twitter, that Tencent, one of China's largest video-game corporations, would be taking over development of the game and that they were no longer attached to it.

One of the first projects Nightdive Studios did following the acquisition of the rights was to develop System Shock: Enhanced Edition, which was released via GOG.com on September 22, 2015 for Microsoft Windows.

[77] The release also includes the original version of the game, titled System Shock: Classic, with support for Microsoft Windows, OS X and Linux.