Racing games "tend to fall into organized racing and imaginary racing categories".

Racing simulations: Organized racing simulators attempt to "reproduce the experience of driving a racing car or motorcycle in an existing racing class: Indycar, NASCAR, Formula 1, and so on." These games draw on real-life to design their gameplay, such as by treating fuel as a resource, or wearing out the car's brakes and tires. Damage is often modeled as a single variable, with more accurate simulations modeling damage to different areas of the car with differing consequences. Aside from trying to win races without crashing, players will sometimes earn prize money that they can spend on upgrading their race car.

Arcade racing games: Less realistic racing games, sometimes called imaginary or arcadelike racing games, involve "imaginary situations, driving madly through cities or the countryside or even fantasy environments". These games focus less on realistic physics, and may add other challenges such as collecting power-ups, driving through hoops and cones, or shooting weapons at rival players.