There are four animals fighting on screen – except they're not really animals; they look like drunk men in animal costumes.

A drunk man dressed as a cat has a drunk man dressed as a dinosaur pinned down on a factory platform, just feet above a piece of nightmarish industrial machinery. The dinosaur is trying to climb away from the spinning discs of death, but the cat is punching him in the face. Finally, the prehistoric monster slips into the whirring abyss, still flailing uselessly.

The players are laughing uncontrollably. Everybody who plays or watches Gang Beasts ends up laughing uncontrollably. It is probably one of the silliest beat-'em-ups ever made – yet despite, or perhaps because of this, it has already appeared in over 1500 YouTube videos made by a growing army of fans. And it's not even officially out yet.

Gang Beasts, if you haven't figured it out yet, is a multiplayer brawling game. Up to 10 players can take part, entering an array of environments, from amusement parks to skyscraper window cleaning platforms, and then they fight. The last drunken animal standing is the winner.

The controls are super simple – left punch, right punch, grab and lift – but married with the hyper-real physics engine, which gives every movement a weird sort of intoxicated naturalism, the fights are enormously varied, clumsy and entertaining. Imagine a cross between Super Smash Bros, It's a Knockout and that cat and mouse sketch from Big Train and you're there.

From fantasy to fighting

Apparently, the game didn't start off as a comedic fancy dress pub fight. Brothers Jon, Michael and James Brown were originally working on a fantasy adventure named Grim Beasts, but they got sidetracked.

"We wanted to develop a really satisfying punch mechanic," says James. And in the end, the punch mechanic was so satisfying it took over their development efforts completely.

The thing is, the Brown brothers were sort of born to make Gang Beasts. They grew up in the coastal town of Redcar, where, as teens, they pumped coins into classic multplayer brawlers like Gauntlet, Teenage Mutant Ninja Turtles and Double Dragon.

Most of those cabinets are gone now, replaced by gambling machines and bingo, but Gang Beasts pays homage to those dumb yet compelling artifacts of pixellated violence. It is super knowing about how silly this genre is, but also how compelling the great brawlers were, and how they relied on pinpoint controls and lively environments.

Now based in Sheffield, the Browns are working out of their sister's flat under the studio name Boneloaf. They've employed a fourth team member, Jason Pugh, and they're building Gang Beasts using the popular Unity3D game engine.

The characters utilise default physics technology, but the team has constructed its own rigid body animation system to generate all the extremely lifelike interactions. They have had to effectively teach the characters how to move, how to climb and throw – there's no motion capture, everything is driven by physics. Albeit with a slightly drunked driver.

Right now, there's a variety of animals to choose from, but the aim is to make them completely user-customisable in the final release – complete with ridiculous outfits. There are other plans too, including new moves such as kicking, choking and elbowing, and a full story mode featuring rival gangs and end-of-level battles. "We're going to add genital geometry so you can punch boss characters in the groin" says James with understated relish. "This will bring them down so you can attack them like a pack of hyenas."

The team is also tweaking the environment physics, so for example, in the wrestling ring setting, you'll be able to slingshot off the ropes to crash into opponents. The final game will also feature environmental escalation so barriers give way after time, or ropes snap, making the world unpredictable for the brawling beasts.

But in truth, just watching these lumbering characters attempting to strike and maul each other is already amusing enough to draw a huge online fanbase. After showing the game at a series of festivals and exhibitions this year, it has been picked up by the YouTube community, who are making hundreds of "Let's Play" videos – the slapstick visual humour is a gift to these guys. Even YouTube superstar PewDiePie played an early version of the game.

There's no firm release date yet. The team is currently finishing a new PC build which should make it on to the Steam Early Access site by early August. They also have console development kits and would quite frankly be insane not to convert the game to Xbox, PlayStation and perhaps even Nintendo. As Mario Kart 8 has wonderfully shown, there is still space in the market for well-crafted local multiplayer games, and Gang Beasts perfectly replicates that experience of being huddled round an arcade screen playing Golden Axe, laughing.

And let's face it, we will probably never tire of watching what looks like drunken people in animal costumes inexpertly brawling. That's pretty much timeless.

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