The Living Room is a room in Mr. Peterson's house that's been there since the first version of the game.
In the Pre-Alpha, this is room where the neighbor was at 95% of the time. He mainly watched TV. In the start of the game, the basement door would be cracked open and we'd have to go into the neighbor's house to go to the door. When walking up the door, the neighbor would jumpscare us and we'd start the game.
The living room contained the basement door, a lockpick in the dresser the TV is on, and the key for the basement door. There was also an area rug, a chair, a couch, a picture of the neighbor and his friend on the wall, a TV, plants, drapes, an Alarm clock, and boxes. The staircase was blocked off by furniture. Every so often the room would change after the player got caught enough. There would just be a chair, a wardrobe, an armchair and a flashlight. Only the TV would remain unchanged. The couch would completely disappear. After getting into the basement, the couch and the rest of the furniture would return and the neighbor would no longer be on the TV all the time. He more often sleeps on the couch now.
On the TV, the neighbor was watching a Spanish Bank commercial according to the YouTube user Bob Green providing the translation. This TV sound was never used in any other builds of the game, making this a Pre-Alpha exclusive like the Reverse Room.
Similar to the Pre-Alpha, the living room has the same layout and the couch is in the same place. This time, the staircase to the second floor is now accessible and we can get to the second floor, and the Flooded Room. The basement door was in the same place. There was a crow painting now, more boxes, a basketball, a flashlight, two hats, a radio, alarm clock, TV, and a TV remote. The neighbor was occasionally in this room, but not nearly as much as in the Pre-Alpha. The basement door now had a lock and two boards on it. In this build, the key and lockpick were no longer here.
On the TV in this build, the Spanish Bank cmmerical was replaced with the sounds of some 1950's style movies and switching to an old fashioned sitcom with some guys laughing and talking. This sound made it to the final game and is one of the sounds you'll hear on the TV. From Alpha 1 - Beta 2, this was the only sound for the TV, before new sounds were added to the TV in Beta 3.
In Alpha 2, we got a brand new living room. It was smaller with two doors, one leading to the kitchen, the other to the hallway. It has the basement door by the couch. There's a bookshelf full of books, armchair, the TV, boxes, wardrobe, a potted plant, and other items. This version of the game also brought the TV antenna. The neighbor spends about a quarter of his time at. There's noting important in the living room other than the basement door being in the room. This is where the neighbor sleeps most of the time, but he'll sometimes sleep in his Bedroom too. Behind in the wall behind the couch, there's 3 kids building blocks, and a painting of an Apple Orchard, which was meant to be in the living room but was never in the room itself.
In the intro in tutorial mode, after we get in the house and bring at least one thing inside, there's a cutscene that plays where we lay down on the covered couched. There's a covered couch and chair, a TV stand, a door that leads to the bricked off basement, a few boxes, and a bookshelf with a hat on it. After we fall asleep on the couch is when we wake up to the neighbor attacking us, and then after the cutscene plays, we run up to the window on the front porch. We look inside and see the neighbor run out of the basement, and then shut and lock the vault door behind him. Then we sneak inside the front door, and we knock over a coat rack which alerts him. He stops hammering the door shut and comes to investigate. After he goes away and we walk down the hallway getting caught by him, the game starts.
In Alpha 3, the living room got another make over. It had a couch and an armchair with a little side table with a TV remote and plant on it facing a TV. There glue jars, a vase, shoes, flashlight, binoculars, a plant, and books on the shelves. Inside the room was also boxes, vases (that could break in this version), a wardrobe, boxes, trash, and paintings on the wall. There was two doors leading into the room, one being blocked with boxes and a vase. You'll have to remove these items out of the way in order to get in through the door. The door that is blocked is to the right of the front door.
Unlike the previous three builds, the basement door is not in the living room, it's the first door you see in the hallway after opening the front door. In this build, the neighbor spends little time in the living room unless you change something that draws his attention, and then he'll patrol the living room and Hallway heavily. Before getting his attention, he spends more time in his Bedroom and Bathroom in this build. He also tends to wander around outside and in the hallway. There is nothing significant in the living room, but you can always grab the flashlight or binoculars off the shelf.
Alpha 4 Onwards
After Alpha 4, the room remained mostly the same. Very few things were changed from Alpha 3 to Alpha 4. The art style of furniture was changed, but not much else. This stayed like this (almost exactly the same) from Alpha 4 - Act 3.