"We have just come through Alpha. We are screaming and on fire." Andy Wilson, producer of Bodycount, was, I believe, speaking metaphorically when he showed off the latest build of the game at Namco Bandai's big press event in Dubai last month. And after a decent E3 showing last week, the flames must be well and truly doused.

It has certainly been an interesting development story. The title drew an explosion of press interest earlier this year when the game's director Stuart Black left the project under something of a cloud. Everyone wanted to turn it into a "studio in chaos" story, but the studio selfishly wrecked those plans by quietly getting on with the job at hand.

"It kind of did a disservice to the 110 people who have worked really bloody hard on Bodycount to suggest that one guy going is actually going to make that big a difference," says Wilson. "But, then, if you look like you've been through turbulence, when you get press stories about your 'problem project', it does give you a real underdog feeling. It really makes you want to prove people wrong."

But then, many of the staff here have already proved themselves in this sector. A majority previously worked on Black, Criterion's aggressively stylised, effects-laden shooter, that arrived to critical acclaim at the end of the PlayStation 2's glory days. When a proposed sequel fell-through, they joined what would become Codemasters Guildford, apparently to continue Black's legacy. "One of the reasons Stuart leaving hasn't had the impact it could have been is that we locked the content pretty early, which you have to do when you're building a team. If we came racing through production, experimenting all the way, it would have had a bigger impact. I'm happy that the core of everything is what we set out two years ago. We stayed true to it."

The result could well be one of the most progressive and individual shooters for a number of years. Set in a dystopian, war-ravaged near-future, the action follows an ex-forces hard nut employed by shadowy private security firm, The Network, to fix combat hotpots around the world (imagine Country House Rescue, but with more gunfire and less country houses). It soon becomes clear that these seemingly unrelated localised disputes are being manipulated by another high-tech corporate presence named Target. Just what the heck is going on?

The gameplay high concept is simple; almost every scenic element in Bodycount can be shredded to pieces by bullets and grenades. Brick walls, wooden fences, metal barrels – they're all vulnerable. At the same time, the levels are generally open and expansive, with multiple routes between the mission start point and the eventual destination. The result is an ever-changing, high-octane battlefield, in which cover positions become exposed in seconds as bullet-fire rips through the scenery.

It's also unashamedly non-"realistic". "It's an arcade-style experience," says Wilson. "This is not a grim and gritty real-world shooter, it's not set in any particular conflict. It's about accessibility and immediacy." But he's keen that we don't read "arcade" as "easy" or "shallow". Judging by the level I played, set in and around a decrepit dock site, Bodycount should be neither. Within these splintering worlds are enemies who don't infinitely respawn and don't perform endless re-enactments of the charge of the light brigade. Instead, the team has implemented a class-based AI system, allowing computer soldiers to attempt rudimentary squad tactics, or simply to sneak up and pepper you with lead while you're looking in the other direction. At one point during my hands-on, a lone infantryman tailed me up some stairs, through a building, and along a steep incline before taking his chance to blast me in the back. That was quite a surprise.

Adding to the chaos is the presence of two warring factions: the army and the militia. Each of these features specialist combatants, such as medics and commanders (who can call in airstrikes) and they'll all fight each other if they meet in the warzone. As everything is procedurally generated, the skirmishes play out differently every time. It might be tempting to sit back and enjoy the carnage, but this isn't a good idea – kills are needed for intel, the in-game currency that every dead body drops. This stuff fills up a meter at the base of the screen, which eventually provides access to four temporary special abilities: explosive ammo, the ability to call in airstrikes, invincibility and a radar, which highlights enemy positions. Each of these can also be upgraded to a second level of lethality.

But there's a two-tier system here, which is where the arcade thinking comes in. Just shooting a guy earns you blue "low-yield" intel that takes a while to fill up the gauge. However, perform a skill kill such as a headshot or a multiple kill with a grenade and you pick up yellow "high-yield" intel that powers you up much faster. It's also possible to chain skill kills together, which not only gives almost instant access to abilities, it also multiples your score count for the level. An extra complication is added by the presence of battlefield scavengers, specialist enemies who'll steal intel and ammo if you don't get there quick enough; the equivalent of bonus items flashing and then disappearing in an old school arcade title.

This coin-op shooter feel is accentuated by the offbeat sound design. When ammo runs low, every bullet fired is accompanied by a musical note, warning you to re-load. Musical themes also play when you grab intel, which is represented on screen by the glowing neon icons. It all brings to mind the aesthetics of Cave or Treasure title, rather than the slavish authenticity of CoD and its ilk. "This is a deliberate design decision," says Wilson. "We wanted to hark back to the arcade experiences we grew up with. It even extends to the score, where we occasionally introduce the odd 16bit-sounding riff over the soaring strings." In short, this is bullet hell projected into a 3D landscape.

These idiosyncratic style decisions extend to the environmental designs. Each of the game's three chapters are colour-coded; the opening is all greens and yellows, denoting a rotting, sickly landscape. When the action moves to Asia in chapter two, it's all Bladerunner-style neon, rain and electric blues. The closing section moves into the Target HQ, where hellish reds dominate. There's a real sense of cinematography and mood; an attempt to convey something else apart from photographic "realism". "A lot of games go down the route of using photographic textures, even Split/Second was like this; you'd use a lot of photographic reference to build your textures – and even if you paint over or into them you still have this real-world basis to the art. Bodycount is very different – it's an artist-crafted game, the art director Max Cant was very keen on this. It's almost painted, it's taken a lot of fine art skill from the design team, and it's tested abilities that a lot of artists in the industry don't have anymore because it's all so machine driven now."

This is particularly defined in the Target buildings that players must raid at the end of key missions. These are ominous slabs of cutting edge architecture, the interiors all brushed aluminium, glass and gloss surfaces. We're shown one example, which is all minimalist black and red interiors sectioned off into glass compartments. Target guards, dressed entirely in black, pour out at us, splitting off into flanking squads and whipping in and out between support beams. The whole set up oozes style and threat, like a cyberpunk action sequence directed by Stanley Kubrick. Wilson also references Star Wars and Tron: Legacy as influences.

Possibly though, the most interesting facet of the game is its modestly revolutionary cover lean system. Instead of having to "stick" to cover objects, players simply press down the left trigger to go into an iron sight view; while the button is held, you're rooted to the spot, but you can still use each of the analogue sticks to bob about and look around. As Wilson explains, "Not only can I hunker down behind cover and pick out targets, but as the environment shreds down around me, I can get really nice lines of sight through objects."

It takes several minutes to get the hang of and may be too much of a lateral step for the CoD crew, but it's a really nice, highly adaptive system that emancipates the whole cover mechanic. I tended to use it when ever I had a slightly obscured vantage point, even if I was several metres form the nearest cover object, playing the angles and, as Wilson says, just seeking out those unexpected engagement lines.

Bodycount will be steaming into a crowded marketplace of established FPS mega-brands as well as hyped newcomers such as Bulletstorm and Rage. But it has a very different feel, an openness, a playfulness and a sense of style that will remind many of the classic Rare/Free Radical Design shooters Perfect Dark and Time Splitters. "It's been a great project to work on," says Wilson. "It was a proper trial by fire in terms of building a studio, but it's a brilliant end result as far as I'm concerned." At E3, amid the gritty military shooters and straight-faced sci-fi blasters, he no doubt discovered more about whether the gaming world is ready for a combination of Perfect Dark, Black and Bangai-O. The staff at Codemasters Guildford have built a studio and a fascinating game, the next task – pushing an original IP in the world of franchised super-series – will be their greatest challenge yet.

Bodycount will be released on August 25 for the Xbox 360 and PS3