One day, a heavy fog descends upon the city of Chicago. Within hours, the whole city is engulfed in the mysterious mist. In a move of panic, the government calls for an immediate evacuation of the entire city and for everyone to seek refuge where possible. However, the fog continues to slowly spread across the country. The government is dumbfounded and without an answer as to what the cause is. Enter the ZAKA TV crew, who, sensing a good story is brewing is dedicated to provide a full blown coverage of the phenomenon on site. They head to Chicago, knowing this could be the moment they have all been waiting for in their careers. However... they weren't exactly prepared for what was waiting for them once they arrived...

Michigan: Report From Hell is a survival horror / adventure game entirely played through the viewfinder of a TV camera. The player is cast as the nameless new cameraman in the the ZAKA TV crew, and is hired to film whatever is going on around the team.

Gameplay is a mix of survival horror and an adventure game. The player, who carries a TV camera throughout the game has to document what the news anchors are reporting while also filming things of interest in the surroundings. The player has a set amount of tape which is used up as time goes by. As long as there is tape in the camera, the player can earn points for filming specific things such as sexy things (focusing on the "female" parts of the news anchors for example) to earn erotic points, or gore maiming and corpses earn suspense points. All manipulation of the surroundings in the game is performed by the news anchor in the team by means of the player "activating" certain hot spots or performing certain tasks, thus making the player a side kick of sorts in the game, and the female news anchor (and to some degree the sound man Jean-Phillipe) the main character.

There is no health meter or extra lives in the game in the traditional sense, instead the player has to guard the news anchor and make sure she is safe and/or survives the various perils the team faces along the way. If she gets killed (due to the player failing to protect her), the story moves on and a replacement anchor takes her place. All of the different anchors are fully developed characters and depending on who is killed and who survives the game can end in one of five different ways. Not all choices or actions in the game will lead to the news anchors meeting their demise, but they all affect in which the direction the games will move on. For example, if the news anchor is walking backwards while talking to the player, he can choose to tell her about the branch across the road, making her friendlier. If she isn't warned, she will trip over it and fall, giving a good opening for extra scoop points instead.

The game has to be played through several times to unlock all of the different endings.