The game was developed by Ubisoft without an official FIA or Formula One license for driver names or car liveries, though the studio secured a license directly from the Automobile Club de Monaco and rights to feature several Formula One sponsors, including Schweppes and Castrol. This combination gave the game a degree of authenticity despite the absence of official team or driver branding. The game is entirely unrelated to Sega's arcade Monaco GP series, sharing only the circuit name.
Physics design was modeled on realism: the handling system was compared favorably by critics to Grand Prix 2, with telemetry storage and analysis included as a core feature. The simulation modeled 17 authentic tracks, 11 teams, and 22 drivers, and offered 22 camera angles during races.
The game introduced a career mode absent from its predecessor. Players began with a lower-tier team and were required to perform consistently well to earn promotion to more competitive outfits, adding a progression structure to the championship format. Scenario modes recreated key moments from real drivers' careers without explicitly naming them, sidestepping the licensing restriction creatively.
Returning modes from F1 Racing Simulation included Time Attack, a full season championship, and a 1950s retro mode. A track editor was also bundled, allowing players to design custom circuits. The eight modes in total gave the game considerable replay value relative to contemporary Formula One titles.
The game received favorable reviews on Windows, Nintendo 64, and PlayStation, while the Dreamcast version drew more mixed reactions, described by reviewers as solid but lacking enhancements over other versions.
Computer Games Strategy Plus awarded the PC version four and a half stars out of five, citing accurate driving physics, detailed graphics, and strong multiplayer options. PC Gamer gave the PC version universal acclaim. Mark Asher characterized the PC version as a superior racing experience that genuinely captured the sensation of driving a Formula One car. Edge rated the PC version seven out of ten in its December 1998 issue.
On Nintendo 64, N64 Magazine rated it 87% and Hyper assigned 83%. For PlayStation, Official UK PlayStation Magazine gave it seven out of ten, calling it better than F1 '98 though inferior to that series' previous entry. On Dreamcast, Hyper scored the game 80%, describing it as geared toward serious racing enthusiasts rather than casual players.
Japanese audiences received the Dreamcast version on 11 March 1999 and the PlayStation version on 30 September 1999; Famitsu scored the Dreamcast release 31 out of 40 and the PlayStation version 26 out of 40.
The PC version was runner-up for Computer Games Strategy Plus's 1999 Racing Game of the Year award, ultimately losing to Dirt Track Racing. The staff cited the game's graphics and vehicle physics as highlights of the series.
Racing Simulation 2 occupied a niche between pure arcade racers and full-fidelity simulations. Critics noted that the game's blend of authenticity — real circuit layouts, sponsor branding, and career progression — with accessible handling made it approachable for players unwilling to commit to strictly hardcore simulations. Its sequel, Racing Simulation 3, was released in 2002.
The Monaco license and sponsor agreements gave the game a distinctive character in the crowded late-1990s Formula One game market, where titles from EA Sports, Sony, and Psygnosis competed for similar audiences. The multi-platform release across four hardware generations in a single window reflected Ubisoft's publishing ambitions in the racing segment at the turn of the millennium.