Just like in the original, Project Zero 2: Wii Edition is set in the Minakami (皆神村?) region of Japan. While a dam is being planned for construction in a forest at this location in the game's present, the site is also home to Minakami Village (lit. "All God's Village"), a "[l]ost" settlement where the majority of the game takes place. The player learns that Minakami Village was host to the "Crimson Sacrifice Ritual", the failure of which caused the settlement to vanish—thus earning it the name "The Lost Village". In the game's present, there is an urban legend about the Lost Village, where people who become lost in the Minakami forest will become trapped forever in the village.