The Inventory is a secret club built underneath a video game storage warehouse. It was established in 1919, after a first draft of the 18th Amendment was acquired by a group of connected gamblers. It was discovered that it could not only outlaw libations, but games and amusements that could decrease the productivity of the national workforce. Despite this never coming to pass, the club has existed since in secret, just in case Congress tried to set prohibition into law. As a newcomer, the player competes in a friendly game of Texas Hold'emPoker with Max of Sam & Max, Strong Bad from Homestar Runner, Tycho from Penny Arcade, and the Heavy class from Team Fortress 2. The player is first greeted by Reginald Van Winslow, former captain of the Screaming Narwhal, and sidekick to Guybrush Threepwood in Tales of Monkey Island. He explains the back story of the Inventory, and raises the blinds in game.
Poker Night is a computer-based Texas Hold 'Em poker simulation between the player as an unseen participant and the four characters, Max, Tycho, The Heavy, and Strong Bad. Each player starts with a $10,000 buy-in and stays in the game until they are broke, with the goal of the player being the last player standing. The game uses no-limit betting and a gradually-increasing blind bets over the course of several rounds. Randomly, one of the four non-playable characters will not be able to front the money but will offer one of their possessions as buy-in for the game. The player can win these items as Team Fortress 2 unlockable equipment only if he or she is the one to bust that non-player character out of the game. The game keeps track of the player's statistics over the course of several games, and by completing certain objects (such as number of hands or games won) can unlock different playing card or table artwork to customize the look of the game.
On May 15, 2009, Telltale Games started a survey which was meant to gauge fan reaction to a sequel to Telltale Texas Hold'em. While the team liked the deep conversations that the characters in the original game had, they decided to not go down the same path for the new game, using recognizable licensed characters rather than original "generic" ones.
Poker Night grew out of an idea from Telltale employees, wondering "what video characters do when they're not 'on the clock' in the games we play", according to Telltale CEO Dan Conners. From there, they pitched the idea to other companies in the industry and were able to work out which characters they would be able to include. Telltale considered how the four characters would interact with each other, developing dialog, banter, and reactions to certain plays. The characters, they decided, would be fully voiced, and would have distinctive tells and dynamic responses that would manifest themselves as the game progressed. Conners stated that the goal was to create the experience of "hanging out with their virtual buddies, shooting the breeze and playing a good game of poker". Telltale is considering a potential series based on this game using different characters in the future, but would need to see sales exceeding 100,000 to 200,000 units to make it feasible.
Telltale Games have had previous experience working with several of the characters. Two of Telltale's episodic adventure series include three seasons of Sam & Max and Strong Bad's Cool Game for Attractive People based on the Homestar Runner web series; both were developed in conjunction with the original creators, Steve Purcell and The Brothers Chaps, respectively. The appearance of Max and Strong Bad in Poker Night are based on the three-dimensional models from these games. The company's team were also fans of Valve's Team Fortress 2, including creating an informal team to participate in a competition between several game development studios; Telltale offered to create unique items based on Sam & Max to be given as a bonus gift for those who purchased the third season of Sam & Max through Steam, and formed a friendly working relationship with Valve as a result.
Telltale aimed to make the game dialog-centric between the four featured characters. To that end, they created a large amount of dialog for each character and possible interactions between the characters; according to Jake Rodkin, Telltale's graphic designer, they wrote more lines of dialog for the game than a typical Sam & Max adventure episode. Telltale always wanted to respect the original characters and worked with the individual creators and studios to improve the lines; they previously had gotten similar input from Matt Chapman for Strong Bad, while Jerry Holkins was extremely helpful to refine Tycho's character based on Telltale's draft dialog. The developers also wanted to avoid any forced interactions, and instead developed what they felt were natural relationships: Tycho dislikes Strong Bad while getting along well with Max, while the Heavy looks upon Strong Bad as a tiny Heavy. The characters are also written to be somewhat cognizant of their nature; according to Rodkin, Tycho and Strong Bad are aware of their video game nature, while Max is ambiguous and the Heavy remains blissfully unaware of his death-and-respawning cycle, simply attributing his memories of dying over and over again as dreams.
Poker Night is the first game to include a voice artist for Tycho; provided by voice actor Andrew "Kid Beyond" Chaikin. The other three characters are voiced by their current voice actors: Max by William Kasten, Heavy by Gary Schwartz, and Strong Bad by Matt Chapman. The game uses existing 3D models for Max, Heavy, and Strong Bad, while Tycho's is built from scratch; at the time of the game's announcement near the Penny Arcade Expo, Telltale was still working on refining Tycho's model, though it was briefly seen during their Make a Scene panel at PAX.
The game was teased by Telltale Games a week prior to its official announcement through a short video on Game Trailers TV, showing the silhouettes of the four characters' official art. The game was officially announced by Telltale Games on September 2, 2010, the eve of the 2010 Penny Arcade Expo. Players who have also purchased Team Fortress 2 will be able to unlock unique items based on the four respective franchises within that game through progress in Poker Night; a special poker visor for Team Fortress 2 was also available for those that pre-ordered the game.