This article contains lots of spoilers about Alan Wake, and should not be read before completion of the game as it will ruin the surprise and experience of one of the finer told stories in gaming. The game is one of the few I personally would label more than a game but an experience, so have that experience before reading this article.
Alan Wake is a story that follows true to the genre it's cut from; Lots of what happens is left open to interpretation. However, though some are used to straight forward answers may call foul on the company for a "Weak" ending, that's only because they don't understand the genius Remedy has wrapped up in this tale. I have done a lot of study in the game itself, outside sources such as the Developers Commentary, the Alan Wake Files book, and been reading up and forming my own theories. This analysis isn't trying to come to a conclusion though, to conclude on something open-ended right now would be silly. However, we do want to support evidence for several possibilities laid out for peoples convenience.
The first area is something we know, the story of Thomas Zane. Tom was a poet, a very successful one at that. He hadn't had a very happy life, that is, until he met Barbara. She was his muse and unlocked feelings inside of him he didn't even know he had. He loved her very much and was happy on a cabin in Cauldron Lake in Bird Leg Cabin, called so since the island was shaped like a bird leg. However it was nicknamed Divers Isle for how much Tom loved to dive in the lake. Beyond diving, he found a special power the lake had where the words he wrote would come true. He made things happen for him and his love, and being a diver cited the treasures that laid under the lake's waves. Barbara went to the lake and in some form of accident got caught under the waves and drowned. Tom went searching for Barbara, but when he couldn't find her he was overcome with fear and as the day passed he went to write his love back by his poems and the magic of the lake, and the Darkness which laid sleeping deep under the waves awakened. Barbara came back to Tom, and cited sweet words and playfulness, but Tom was overcome with horror as he realized this wasn't his love, his sweet and kind Barbara. It was some form of Darkness wearing her face only acting like his love, a heart filled with darkness. Tom tied her to his home and went to undo everything he had created with his powers. He went to one of his closest friends, Cynthia, who had a major crush on him and thanks to his stories was also touched by the Darkness (as it becomes evident the "Magic" of the lake is, in fact, the Darkness's magic where it makes things from creativity come true but twisted to it's dark ends) and he gave her a shoebox and asked her to protect it from the Darkness until a man came specifically looking for it. Tom knowing her feelings for him and in a way using her to help him, but it was essential. Tom then unwrote everything he had made come true with the exception that what was left in a shoebox would still exist after he unwrote everything. He took Barbara and cut her heart out with a knife and in his diving suit leapt and carried him and her down the bottomless lake.
Cynthia became the "Lady of the Light". She lived in a home in the power plant completely filled with light, only coming out in Daytime and protecting the shoebox in something she made she called, "The Well-Lit Room", a room completely void of any shadow or darkness with so many bulbs constantly keeping track of them and which ones needed changing. She also did this throughout the town to make sure the Darkness couldn't take advantage of the shadows. 30-40 years passed of her doing this, and she diligently protected the shoebox. The contents of the shoebox were unique. Firstly it had a Clicker, a simple button with two wires sticking out of either end. The other was a manuscript page of his own story, telling of six-year old boy named Alan Wake being afraid of the dark and having a hard time to sleep. That is, until his mom one day gave him something she called a Clicker, saying that whenever you pressed it it would create a magical light that would make all the monsters disappear, adding it was from Alan's father, someone Alan had never gotten to know. Also written was Alan remembering this moment, clutching the Clicker in his hand as he closed his eyes and jumped into Cauldron Lake.
This first story point leaves some interesting speculation, since why Tom would specifically leave a couple manuscript pages describing Alan Wake into these moments and leave them in the shoebox and some of the only contents suggests a few things. The first is Tom wrote Alan up, meaning Alan is a character who was created by Tom's powers and now is a real living person who gets to fulfill the pages of the Manuscript up to that point. However, that is not the most likely situation. One heavily suggested thing also is that Tom is Alan's father. A big indicator is that, the Clicker is from Tom, and Tom wrote specifically that the Clicker was from Alan's father he never knew. This would also explain why Tom writes about Alan since in a way he's passing on the legacy to his son as he makes the ultimate sacrifice to stop the Darkness from growing in power. The one problem with this is that Tom loved Barbara, and though we don't know Alan's mom or who she is, it's very doubtful his mom was Barbara. However, one explanation could be the bad life Tom lived before he met Barbara. Many poets are famous for their relationships and feelings on love, it is possible Tom could of slept with Alan's mom and he is as such Alan's father even if his mom and him never got married and he left before Alan got to know him. At the very least though, Tom somehow knows Alan or else he wouldn't be writing about him. Another possibility is he is an uncle of Alan and maybe handed something down to his nephew that he received from his brother, or Alan's father. A final interesting point to be made is that the Anderson Brothers and even Barbara on occasion refer to Alan as Tom, which either suggests he looks amazingly like him or there is something more there.
HOWEVER, the ultimate evidence comes in the manuscripts. There is a manuscript depicting an unknown woman depressed over her cheating lover. We also know thanks to the Manuscripts that Tom and Barbara had gotten into a huge fight over something. And why does Cynthia seem so attached to Tom? Tom knows Cynthia liked him... Could it be the cheating lover was in fact Tom and the depressed woman was Barbara? Cynthia is so in love with Tom since he lead her on? Barbara is cited to be a good swimmer, so how did she drown? Could she have purposely drowned herself in the very lake that gave Tom power? This would prove that Tom is at the very least is a cheater, though personal doubts about Cynthia being Alan's Mother, but he may have had other affairs also. However, even more evidence of this is drawn in parallels in the Alan Wake Files. Alan Wake writes a short story in the files that tells the story of a son who meets his long missing dad. The dad has been planning to kill his son, but when he see's his face he can't bring himself to it since he is shocked how much he resembles his lost love, the son's mother. This could be a form of symbolism for the games bond between Alan and Tom. Alan never knew his father, and in the game he meets Tom. Maybe Tom putting Alan's memories in the shoebox was his way to let his son live? If he had unwritten himself out of reality all together if he did have a son that would of been written out too, so maybe something stopped him from taking Alan away from the world? Even deeper in the Alan Wake files, the Darkness may in some way take on traits of Barbara using her as it's skin. The Taken have no emotions but still have some shells of their former lives, shown in the lines they randomly say, but Barbara may have further examples. Barbara mentioning Tom on more than one occasion says one thing, but the Alan Wake Files depict three different occasions by the lake, all involving couples. A couple were getting intimate by Cauldron Lake when a shadow came and shocked both of them and stopping them. A couple that were so close and in love with each other both died on opposite sides of the town at the same time of natural causes, and an actor named Mr. August who is trying to act out love by the lake when some crazy stuff begin to happen. It is evident either the Darkness hates love or maybe some traits left of Barbara have taken form in the Darkness, including maybe a jealousy at love.
Next up for examination is Mr. Scratch. A lot was left unanswered in who exactly he is, though a little research can unearth some facts on who Mr. Scratch in general is. Mr. Scratch is the name of the Devil in German folktales. Coincidentally, Mr. Scratch appears in a story known as "Old Scratch and Tom Walker" though Alan Wake's versions of Mr. Scratch and Tom may be drastically different, since in the tale Tom is a selfish man who in the end gets his soul stolen from Mr. Scratch. Mr. Scratch in question makes deals with people and in exchange for their soul and skin, will give them them means to their dreams. In Alan Wake, the Mr. Scratch we see, all we know is that he looks exactly like Alan Wake (though noticeably he dresses to match Alan how he looked after he lost a week with a bandaged and hurt head, more on that in a sec) and seems to copy Alan's every move with a somewhat creepy unnatural smile on his face. Tom cites that while Alan is away, Mr. Scratch is the one who will interact with his friends. Some suggest the whole game is played as Mr. Scratch since of the bloodied head but since Alan needs to get back to the Cabin under Cauldron Lake himself and since his head injury is cleared up after the first episode, we can rule this option out. I believe the head injury is more incline with Alan reversing time. When it shows Alan reversing time, it shows Alan jumping in the lake after Alice, which is at this point afterward where Alan got his head injury, and is where Mr. Scratch may come in Alan's new version of what happened. It can be assumed Mr. Scratch is wandering in the world as Alan still, since in the Alan Wake Files it talks about Clay Steward near the end of the files about half a year after the events of the game spotting Alan Wake in the woods but no matter how much he would run after him he would never be any closer to reaching him. This is likely Mr. Scratch, seemingly no matter how hard you try to catch him, he has some kind of supernatural power so you can never get closer to him.
Speaking of Clay Steward, those who haven't read the Alan Wake files may be confused on who he is. Here's a quick rundown; Clay Steward is a real man, he started having nightmares though where he kept running into a man he didn't know in a similar setting over and over again. One day on TV though he saw a man named Alan Wake who looked just like the man Clay had been seeing in his dreams. Clay started doing in-depth study on Alan Wake and who he was, and in the downtime of what became like an obsession he lost his wife and she took their child with him. He went to Bright Falls himself and asked all around to figures such as Barry, Sarah, Rose, Nightingale, Hartman (apparently both alive) and more about Alan Wake, but as a year after the events of Alan Wake dawns it seems no one, not even Alice, has seen Alan. Or at least not at which they say, since we can only see Clay's perception. However, it becomes apparent at the final words of the files that something after seeing Mr. Scratch has done something with Clay. Throughout the whole book he speaks from a factual and interview style, making them very much files though mentions in notes how his wife and child have left him, however in the final paragraph at the novel he is talking about people pitying him for loosing everything, but as he writes in his own words, "See, they (the people who pity him) don't understand what I have. They don't know that when I finish work, my back sore and my feet as heavy as cinderblocks, that I catch a bus to the other side of town where I climb six floors to a small but well-kept apartment. They have no idea that when I open that door and see my beautiful wife and boy look up at me and smile, that I am awash in the light and warmth of a thousand suns. They don't understand that I have treasures beyond their imagining. That I am untouchable, alive, and that I walk in the light." This is out of place since up to this point he had mentioned on more than one occasion his wife and child had left him, yet after seeing Mr. Scratch something seemed to have happened. However, he and Alan seem to have some kind of bond with each other, to the point they shared the same dreams. The connection they have is unknown at this time though and further ideas have no evidence behind them, since they're only really explored in the Alan Wake Files and hinted at the very beginning of the game in Alan's nightmare sequence where Clay and Alan are seen sharing a nightmare together again.
Also in the Alan Wake files relating to the beginning of the game, it is mentioned in the files that Bright Falls has a Lighthouse. Anyone who has played the game or looked at the map of Bright Falls will quickly realize there is no lighthouse in Bright Falls. However, the Alan Wake Files take place between half a year and a year after the events of Alan Wake. This may externally be linked to the final line of dialogue spoken in the game, "It's not a lake, it's an ocean." Go back to Alan's dream. In his dream, Alan mentions how he just instinctively knew that the Lighthouse was the last safe haven in the world. However, the nightmare Alan has according to signs and billboards around the location takes place in an area known as Rain Cove which we never see in Alan Wake outside of the dream. Bright Falls isn't next to an ocean though, so there would be no need for a lighthouse since there's no ships coming. However, if there is an ocean, then there will be a lighthouse, and if there's a lighthouse, that might make Bright Falls safe from the Darkness if a Lighthouse really is a safe haven from the Darkness. In trading and balancing between light and darkness as Alan says, he may have literally turned the lake the Darkness resided in into an ocean, which in turn gives Bright Falls a lighthouse for protection though makes a bigger source of Darkness. which now may be bordering on other towns and areas as well.
However, there may be more to it than that. When Alan says, "It's an ocean" he says it in the demon-type voice Jagger used when under the influence of the Darkness, which might suggest something in Alan himself. It's doubtful he is possessed in the same way as Barbara, since the two upcoming DLC episodes, "The Signal", and, "The Writer", both star Alan still and are after the game, but we know little except that Alan is facing a new threat unlike anything he has ever experienced before but at the same time familiar, and he needs to follow the signal. This may reveal more than what we have here, but all this talk about the Darkness in the lake leaves to a bigger question. What is Cauldron Lake?
In Episode 3, the keeper of the Trailer Park mentions that Indians believed that Cauldron Lake was a doorway into the Underworld. The Indians may have been onto something. As Tom cites in his poem at the beginning of the game, "For he did not know, that beyond the lake he called home, lies a deeper, darker ocean green, where waves are both wilder and more serene. To it's ports I've been, to it's ports I'VE BEEN." As you should of figured Tom is dead and only written into the story by Alan. So if he's dead and citing he's been to ports on an ocean beyond the lake... Well he may be in the Underworld. In ancient Greece mythology the land of the Underworld said to be ruled by Hades is only reachable through a lake of death, this might be something similar to that. That would make it that Cauldron Lake is a portal to the Underworld where the Darkness lays. and the vaster ocean is the other side of the lake which leads to the Underworld. And going with the theme of the Underworld, this would also explain how a person named Mr. Scratch, which is a nickname for a devil or demon, could come out of the lake since demons of course originate from the Underworld. This would also explain some of the evil magical powers the Darkness seems to have and how it can bring back dead people. In an act similar to typical demon stories, the lake can make peoples dreams come true, but it twists it at a price for it's own benefit.
Then there's the Deerfest at the end of the game where we see both Rose holding a Lantern like the Lady of the Light and Nightingale in the shadows like Barbara. Tom and Barbara are dead, and Cynthia spoke about finally being able to move on with her life, as she was growing tired of protecting Bright Falls and wanted to be relieved. Rose and Nightingale were both touched by the Darkness, with Rose literally being controlled by it and under it's power. To say it likely affected her is an understatement, she may have become the Lady of the Light for several reasons, or at least sticking to light to ward off the Darkness. Rose has a few parallels between her and Cynthia too; They both loved someone already in love, they both were touched by the Darkness, and assuming Alan wrote Rose this role, might be in a way like Tom asking Cynthia to protect the shoebox for him, a bit using her but needed in the balance of light and dark. Rose however is up to a lot of speculation.
Nightingale was a character a bit confusing if you didn't read the Alan Wake files too. In a past case, Nightingale's partner and closest friend was lost in an event similar to the one in Bright Falls. This firstly suggests the Darkness does not only exist in Bright Falls, and that how many scenarios the Darkness has played in is unknown and locations just as mysterious. The loss hit Nightingale hard and he somehow felt like a failure for letting his best friend die, turning into a hollow shell of a man who turned to booze for comfort. However, when he caught whiff of what was happening down at Bright Falls with Alan Wake, he rushed into there as fast as he could, maybe in some deeper way thinking he could make it up to his dead friend and himself if he was able to stop what was happening in Bright Falls. However, he seems to have had a major misconception. He seems to think that the creative artist are the cause of the madness, thinking that Alan himself is the cause of everything going on in Bright Falls. He doesn't realize there is a Dark Presence over the town, and puts all of his hate and determination to stop Wake. In balance, it seems he may be the new face of Darkness like Barbara. The rest of his future role though is still shrouded in mystery.
As a final small note, Jorge of our staff pointed out to me there are similarities between Hartman and Barry. Barry was Alan's assistant, he helps Alan with his use of words and language to keep him sane, he was Alan's agent like how Hartman was Tom's Assistant. There definitely are similarities though hopefully Barry doesn't become a creep like Hartman did.
Hopefully this answers some questions and keeps you thinking on others, like any good thriller novel or TV Show we are left with the season ending with far more questions than answers but clues hidden all around. The fate of where the series is headed is unknown for now, though in 2 months or so "The Signal" DLC Episode for Alan Wake releases. There may be a few missed things I didn't catch but hopefully this will provide a deeper look into the ending of Alan Wake for the people out there left more than a little confused. You still need to experience the whole game to understand, but season 2 might very well be amazing.