Gothic is an action role-playing game set in a third-person perspective within a fantasy open world. The player controls an unnamed prisoner sent into a mining colony enclosed by a magical barrier. Gameplay emphasizes exploration without quest markers or a guided map, and the player character begins with no skills, learning them by finding teachers and spending earned skill points.

The game features three factions to join, each offering different paths and abilities: the Old Camp provides access to Fire Mages, the New Camp to Water Mages, and the Brotherhood to early magic through worship of a being called the Sleeper. Combat involves melee weapons, ranged weapons, and magic across six circles of increasing power. The environment is highly interactive, allowing the player to cook food, forge weapons, and perform many activities seen in NPC routines.