Midwinter is set in a post-apocalyptic world, as the Earth entered a nuclear winter caused by the fall of a meteorite. The titular island has been formed in the Azores group of islands, caused by volcanic activity.
The player initially controls Captain John Stark, the commander of local militia known as Free Villages Police Force (FVPF), who attempt to protect their home from the invasion of armed troops under the command of General Masters. As Stark, the player has to recruit civilians and members of FVPF in order to join forces and prevent Masters from reaching the base located in the south-eastern part of the island.
Midwinter is a hybrid game that combines elements of strategy and action. The player selects and controls the 32 recruits as they attempt to protect the island within a limited amount of time. Two hours of game time are assigned to each recruit; afterwards, the strategy battle moves to the next turn. During their turns, the recruits fight enemy forces in action-oriented combat reminiscent of a first-person shooter. Specific and detailed injuries add a tactical edge to these battles. Enemy units are mostly composed of armed snow buggies, as well as supply vehicles. Eliminating a large amount of them or killing the commander of the unit usually successfully completes the mission.
Terrain plays an important role in the game, as many snow-covered mountain areas are impassable, and the player must plan ahead how to advance. The player can use snow buggies, ski, and cable cars to access the goal.
When recruiting characters, the player has to pay attention to their personal relationships. For example, Stark can recruit his girlfriend, but another character will refuse to join because he is in love with her and jealous of the Captain.