Forza Horizon 2 is the sequel to Forza Horizon, the arcade spin-off of the Forza Motorsport racing simulation games presented as an open world racing game. Transitioning to the next generation of Xbox, the two versions of the game largely share the same cars, assets, world and features, but were handled by different developers. Rather than upgrading or downgrading a version for the other platform, they each take a distinct direction based on the same concept and content.

Just like the original game the player participates in the Horizon Racing festival with light story elements. The first game's environment was based on Colorado, USA, and now the sequel draws inspiration from southern France and northern Italy, combined with off-road racing and small villages. By participating in events and championships cash is earned and the character levels up, gaining access to new cars and events, with 210 cars in total. Just like the original game exploring is encouraged to locate hidden cars, and experience and travel banners. Different racers you encounter can be challenged freely and various actions are rewarded with experience (for instance through beating speed traps) or skill points for precision and dangerous actions, especially when linked together in succession. These skill points can be spent on perks. New to this game is the Wheel Spin system where a random sum of money or a car is provided after leveling up.

Cars can be customized through different parts, but also aesthetically through body kits, spoilers and a full livery editor. These customized car designs can be shared. The difficulty can be tweaked through general AI difficulty and assists such as traction control or the ideal racing line. Just like the original game there is an option to rewind a short part after a crash for instance. Online racing includes a road trip, free roam and private matches with various settings. Unique to multiplayer and returning from the original game are game modes such as infected and king. It is possible to join clubs and there are car meets where players can show off their cars to each other. In addition there are leaderboards to compete.

Graphically each version uses a different engine. The Xbox 360 version is based on the original Forza Horizon, while for the Xbox One Forza Motorsport 5 was used as a starting point. Differences are notable in draw distance, density of foliage, shadows, rendering and lighting. While both versions have a day-night cycle like the original game, Xbox One introduces more varied weather conditions with atmospheric effects. Any route is basically the same on both versions, but the Xbox One version has more traffic and more variation in the environmental design. Even though sharing the same game world, the location of events, circuits and side quests (such as bucket list quests where a new car is provided on loan) are unique to each version. The same applies to the showcase events, where you race against a land or air based vehicle, where some content is unique for each version. The Xbox 360 is also more limited in the online gameplay features. On Xbox One for instance it is possible to switch between offline and online racing seamlessly. There are differences in presentation as well, for instance in the ways cars are chosen. Entirely unique to the Xbox One version are Drivatars. These are opponents based on the racing behavior of the developers and friends. They have different traits and introduce a human elements to the racing behavior, with errors, collisions, or purposely veering off-road, populating the game world. These can be challenged in head-to-head events.