Bitrate and Resolution Settings for Recording osu! with OBS (Open Broadcaster Software) with a GTX 1060 Laptop?

Recently I've been having many issues with osu! lagging a lot while recording it with OBS. It was suggested to me that I lower the Bitrate and Resolution in OBS settings. I have lowered it to 7200 bitrate and 720p at 60 FPS (I'm using VBR as rate control and the new NVIDIA NVENC H.264 encoder). I am wondering what the best combination of bitrate and resolution settings would be for a computer with these kind of specs (for reference, I use a Razerblade 15 with an i7, GTX 1060, and 16 GB of RAM). By "best," I mean what would be the ideal settings that stop the lag in osu! but also allow me to have a good quality video. Thanks in advance.

Framerate drops like this are almost always caused by an overload of your graphics processor. Even though a GTX 1060 is pretty good and designed to handle most modern games at 60FPS, adding OBS basically counts as playing the game twice in terms of rendering, and it's very taxing on your system.

Lowering the resolution of the game and/or the OBS output will be the quickest and easiest way to increase the framerate while recording. You currently have your OBS rendering at 1080p which is hard to do while running a game at probably the same resolution. Make sure your OBS resolution is no higher than your game's, which could be much smaller especially if it's running in fullscreen.

It would probably also help to lower the recording quality which you currently have at the max settings (20000Kbps=~2.5MB/s seems like a lot to me). Remember that your computer has to keep all of this in memory or be simultaneously rendering and saving it to your system's hard drive, which can be very taxing on even the heaviest rigs. Lowering this output file quality even the slightest bit can free up a lot of VRAM and improve performance.

There isn't a lot going on graphically inside of Osu!, so lowering the graphics settings on the game probably won't help very much in this instance, but it can be good advice for other games.

(The audio issue should probably be asked as a separate question and/or logged as a bug with OBS)