Racing games are split into three categories, Arcade, Battle and Simulation. Arcade racing games are more common and originated in coin-op racing games like Outrun and Initial D. Their gameplay is centred still around skill but the actual mechanics involved in racing are far from realistic. Good examples of arcade racing games include Ridge Racer, Auto Modelista and Midtown Madness.

Battle racing games are probably the most popular kind of racing game as they encompas a wide array of users, from children to adults. Their racing mechanics are generally simpler still than arcade racing games, and have the addition of power-ups. The addition of power-ups can be enacted in a balanced manner, or a much less balanced manner. Mario Kart is famed for its blue shell, which seeks out the player in 1st place and causes them to crash, usually leaving them in 6th or 7th place. Good examples of battle racing games include Wip3out, Sonic All-stars Racing Transformed and Blur.

Finally, simulation racing games are the sparsest type, but heavily subscribed to because of their realistic attributes. There are so few because they are primarily high-budget and require the acquisition of liscences to use real-world car manufacturer's designs and cars. Most racing sim games use complex algorithms to calculate grip, downforce, applied power and wheel-slip to create a more realistic racing experience than the previous two types of racing game. Although this use of heavy mathematics can lead to some strange bugs, not accounted for in real-world physics. Good examples of racing simulators are Gran Turismo, Forza and Grid.