With the Lacey Games episodes being so cryptic, fans have come up with multiple theories putting together the clues they have! Here is a list of some of the most popular ones, along with some fan analysis of each episode!
Possession Theory (Personal Hell Theory)
Frame from Lacey's Diner of a woman connected to a computer.
The most popular theory on platforms such as Reddit and Tumblr, as well as on Lacey Road (ghosttundra's discord server), is that Lacey contains the soul of Rocío Yani, one of the cofounders of Yaniaso Games . The main thing that sparked this theory was the frame at the end of Lacey's Diner where a woman is connected to a computer through wires. Along with the by-name mention of Rocio in Lacey's Diner and mentions of the games changing after Rocío's disappearance by Grace Asop, this theory quickly caught gained plausibility.
Drawing of Lacey with Wings
With this theory, this is how Rocio Yani's story would go: "Rocio went through immense childhood trauma as a result of her uncle's abuse, and possibly continued falling into abusive relationships. As an adult, Rocio helped create Yaniaso Games. She put a lot into these games, and likely created the character Lacey to be a surrogate for the 90s-2000s era childhood she never had. Rocio, who never told Grace about her childhood, was so invested in these games (likely having a lot of resentment for people that actually had these kinds of happy childhoods) that she quite literally connected herself to her computer to live her life as Lacey. But her past trauma kept slipping through, corrupting the once innocent games with disturbing visuals and storytelling. Through Lacey, Rocio is forced to relive her trauma again and again, and die in ways that she really could have if she never escaped her abusers."
Outside of the series, this is further implied by Ghosttundra's drawing of Lacey on their Twitter, depicting her with angel wings while connected to wires. This connects to the line that Rocío says at the end of Lacey's Diner.
The Games Are Not Literal Theory (Lacey Really Killed Her Uncle Theory)
Speech Lacey gives about her dog.
It is heavily implied that each video in the Lacey Games series represents the real Lacey's trauma. But believers of this theory say that they are not literal representations of what she actually went through, otherwise she would've died multiple times. Believers of this theory do not believe she ever cooked her uncle into food, or that she even hid his corpse under a bed. This theory, though, does suggest she killed him, but not in the ways directly shown in the videos. It's also pointed out that if the video's events were all things that happened to Lacey, Lacey's Wardrobe would become especially messy.
Some believers also suggest that the events become more direct in each episode.
Lacey's Wardrobe is a Different Timeline Theory
Because of the vastly different events in Lacey's Wardrobe from the other three episodes, people believe that it is in a separate timeline. This is likely because the Lacey Games series may not have always been intended to be a full series, but a one-shot episode.
Lacey's Wardrobe is After Lacey's Diner/Petshop Theory
Because of the differing events, many people believe that Lacey's Wardrobe takes place after Lacey's Diner and Lacey's Petshop. The main supporting evidence of this is that Lacey no longer is tied to her uncle.
Lacey's Makeup Parlour Takes Place in a Morgue
A freezeframe in Lacey's Makeup Parlour
This theory hinges on the two freezeframe referencing morgues in Lacey's Makeup Parlour, and the fact that Jay appears in the game. The switch to a darker version of the parlour where Lacey holds Jay's corpse and says "she's just a client" support this, along with the strange deformities the other clients have.
This theory is incredibly likely, and is accepted by larger parts of the fanbase.
As of the references being released by Ghosttundra, this theory is confirmed.
Grace is a Villain
This theory comes from Grace's overall apathy toward Rocío's situation and mental health. Grace calls her "cuckoo" and doesn't even care if Rocío is alive or not. Grace also did nothing to stop Rocío from putting disturbing content within the Lacey Games, despite this content "traumatizing children", by her own words.
Theory Sources
Possession Theory: u/nousernameideas22 & randomlonelymusician
Games Aren't Literal Theory: u/nousernameideas22 & randomlonelymusician
Lacey's Wardrobe Timeline Theories: u/No-Run3804 & shr-00-m
Theory discussion can be found in Ghosttundra's Discord server.