The game shows several features from the previous games, including a feature where the user should locate specific materials to build a big Lego object. When the user selects and input the correct materials a screen is displayed where the Lego machine is built and the player should select the correct pieces in exchange for studs.

Also the characters have different actions to perform, making the Dwarf Company a group with different capabilities during the mission, including someone with archery abilities, another that uses a big hammer that can move big objects, another with the ability to extract minerals from stones, and so on. Bilbo improves his abilities as the game advances: when he gains Sting he has the ability to be a more skilled fighter; and when he gets the One Ring he can disappear and build invisible Lego structures.

The game, similar to the latest Lego video games, is composed on a big map, rather than a single hub. The player can move among different events where different characters ask the player to retain a specific material from a mission or to exchange materials.