Taking place in a fictional world inspired by Norse mythology, the game tells the story of the player's caravan as a whole, as they combat a warlike race named Dredge that despises humans.

The hand-drawn animation and art-style featured in the game was inspired by the art of Eyvind Earle, Ralph Bakshi and Don Bluth.

As a wandering army sent to fight against the Dredge and find a weakness for Bellower, the caravan make many difficult decisions that would shape the fate of both man and Varl.

The game takes place in a Viking legend-inspired world, stuck in a perpetual twilight since the sun stopped moving weeks before the events of the game, mainly populated by humans and giant-like creatures called the Varls, as the Dredge, an ancient race believed to be extinct for ages, returns to kill them all.

Continuing their way, the caravan faces many of the Dredge and, while exploring the city in ruins of Ridgehorn, find an unconscious man next to a woman's dead body on the top of a tower.

As they rescue him and continue on their way, the man, Eyvind, unsuccessfully implores Hakon to return to Ridgehorn, convinced his companion is still alive.

Finding the town unsafe, they continue their quest for shelter, eventually having no choice but to seek refuge in the Varl fortress of Einartoft.

Although the Varl of Einartoft refuse to let humans in at first, Iver, whose real identity is a legendary, long-disappeared warrior known as Yngvar, persuades them to let the caravan in.

Meanwhile, Juno, the woman whose body was next to Eyvind when Hakon's caravan found him, awakens in the ruins of Ridgehorn, to find the gigantic serpent facing her.

Rook agrees, as Einartoft is already doomed, and the caravan leaves, soon warned by Ubin and other survivors catching up with them that the city fell a few hours after they left.

More Dredge arrive every day, while supplies are running out and widespread riots are tearing the city apart from the inside, as Rook and his friends decide their only hope resides in building new boats to leave by the sea before it is too late.

As the city's defenses are about to fall before their goal is achieved, they are saved by Juno, together with Hakon, Prince Ludin and an army of Varl who escaped Einartoft at the last moment.

The Dredge would rout if Bellower was defeated and, although he is immortal, the arrow would hit his mind, convincing him of his own death and making him fall into a coma.

Although the game was originally targeted for iOS devices, they decided to focus on Microsoft Windows and OS X instead since it did not perform well on the iPad in early stages.

The choice for the Viking-inspired setting was influenced by Jorgensen, who grew up in Scandinavia and was impressed by tales of Vikings he had heard in his childhood.

The game's main enemy called the "Dredge" were influenced by Shadow of the Colossus, and were deliberately intended to feel alien compared to the Nordic-inspired world.

They intended to engage players emotionally by allowing them to build relationships with the game's characters and shape the outcome of the story through an array of conversation choices.

[16] Stoic developed a custom game engine for The Banner Saga, which they internally termed "Yggdrasil", named after the world tree from Norse mythology.

[18][19] It was also meant as a way to get feedback for the systems they designed for the single-player game and help promote it,[20] in addition to earning extra money till the launch of the first chapter.

[13] While Thomas originally wanted $10,000 in funding from Kickstarter to outsource animation work, Watson convinced the others to raise it to $30,000 after finding that it was the most a project could make.

[28] This allowed the developers to expand the scope of events during travel, port the game to Xbox Live Arcade and PlayStation Network and add a full orchestra score by Austin Wintory.

Stoic begun talks with Valve Corporation to allow them to sell their games on Steam around January or February 2012.

[30] The game was later delayed to the first half of 2013 due to the additional development required after Stoic added in more features, a result of the Kickstarter campaign.

They however settled on having the voice actors talk in English instead of Icelandic, particularly due to language accessibility and fearing that the players would not focus on the animation.

[33][34] On December 17, 2013, Versus Evil announced that those who pre-ordered the game would receive the "Insane Viking Pack" alongside Kickstarter backers.

"[73] GamesRadar+ gave the game 4.5 stars out of 5 and praised it for its unique aesthetic, interesting story, strong AI, and decision-making scenarios while criticizing the lack of a manual save function.

[75] PC Gamer said that the game "ha[d] the weight and feel of an epic" while noting how its potential was weighed down by budgetary constraints.

[76] PCGamesN heavily praised the game's narrative, writing, "Stoic has still managed to weave a compelling tapestry of epic conflicts with emotionally engaging characters".

[90] In January 2017, Stoic launched a Kickstarter crowdfunding campaign for a third instalment in the series called The Banner Saga 3.

It stars Shelby Grace, Andre Meadows, Steve Zaragoza, Dave Moss, and Trisha Hershberger, with Adam Koebel as the gamemaster.