The game is set in a post-apocalyptic future, but the team depicted it as an 'awesomepocalypse' that turns the game's initial world depiction into a 'playground' for players. Insomniac described the game as a 'celebration of games', as the team took inspiration from different sources, including Prince of Persia, Jet Set Radio and Tony Hawk's Pro Skater, though at its early stage of development the team took inspirations from DayZ instead. After the project was green-lit internally, the studio partnered with Microsoft Studios, which helped fund the game and allowed Insomniac to keep the rights to the franchise. The development of the game began in 2011 when Insomniac completed Resistance 3.

As the game puts emphasis on momentum, the game does not feature any cover system. The game also has a cooperative multiplayer mode called Chaos Squad, which tasks players to complete a series of missions with seven players. In the dystopian Sunset City, the player character can wall-run, use zip-lines, and grind rails to swiftly navigate through it, with a large arsenal of weapons to use. The player controls an employee of FizzCo, who has to fight off the OD, short for Overcharge Drinkers: humans who have turned into mutants after drinking FizzCo's energy drink beverage. The game is set in 2027, in a fictional metropolis called Sunset City. Sunset Overdrive is an action-adventure video game developed by Insomniac Games and published by Microsoft Studios.

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