The Kraken is my favourite scene I've created for my game, but it is really simple to achieve this effect. My first step was to accrue assets. The ship above is from Pixabay, which is a website with a repository of free stock images.
I wanted to give the effect of lightning striking. The best way to achieve this is to flash up the light quickly, and then fade it away slowly.
I used Macromedia Fireworks which is old commercial graphics software which may or may not be readily available. No comment.
Instead of adding light, I removed it. I did this by just wiping over with a very dark brush.
This is pretty damned dark but it's sufficient for the effect as the lighter image will be most dominant, we are just fading to this dark screen.
We begin in darkness and then use Show Picture to show our lightning pic on top.
Immediately after we use Move Picture. Move picture is used for moving images in cutscenes for various animations but, crucially, this movement includes a variety of different things including Opacity. By moving a picture from Opacity 255 to Opacity 0, we effectively fade it out.
Keep the origin and position to the same as the previous image. Duration is important; in the end I decided 30 was fine, which is roughly half a second.
In order to make the kraken itself I used the magic wand tool to highlight just the ship, which was relatively simple as it is mostly just a silhouette. I put this in the foreground, and pasted a kraken monster from PVGames in the background, resizing it as necessary. I then created three different images with the kraken in different positions, and with a gap of four frames I switched between them, giving the effect of movement.
The finished product is as below. A very simple, but very effective lightscape.