The Sinking City is an open-world detective game with a third-person camera perspective. It features an investigation system in which the outcome of the player's quests will often be defined by how observant the players are when investigating different clues and pieces of evidence.
The town of Oakmont is made up of seven districts (Advent, Coverside, Grimhaven Bay, Oldgrove, Reed Heights, Salvation Harbor, and The Shells) which have all been affected by flooding to various degrees, and the player must use a boat to safely traverse the flooded streets to reach drier areas. The player can swim if necessary, but the water is infested and can fatally damage the player's health and sanity. The player also assembles an arsenal of tools and weapons, and at times must use them to kill otherworldly creatures and dispel hallucinations. However, as Oakmont is an isolated place with dwindling resources and deteriorating social order, bullets have replaced money as the preferred currency; expending too many bullets can leave the player unable to barter for desired items. Another major resource is sanity, which is spent on investigative powers used to reconstruct crime scenes and identify clues. Sanity slowly regenerates on its own, but can be replenished faster with antipsychotic drugs. Disturbing scenes and encounters can cause sudden, sharp drops in sanity, affecting the player's perception of the surrounding environment, and complete loss of sanity is fatal.
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