There's more than a touch of Stephen King to the long-awaited Alan Wake. A young author and his wife take a trip to the quiet town of Pride Falls - a name that's almost as ominous as Silent Hill. Once there, Mr Wake manages to write a novel - ending a long-troubling bout of writer's block. Unfortunately, the good news ends there: Mrs Wake goes missing, and as hubbie sets out to find her he discovers that much of Pride Falls has been possessed by a mysterious, malevolent force. To make matters worse, it seems as if Alan's latest book is coming true... and he can't remember any of it.

To be honest, after such a long period of radio silence it was a pleasant surprise to find that Alan Wake had a touch of anything - let alone all the panache and fresh ideas revealed at E3. You may well have seen the game for yourself by now, but if not then know that Wake seems to owe more to the likes of Silent Hill and Alone in the Dark than it does to Max Payne, Remedy's previous action-adventure hit. That said, there are certainly similarities with MP - notably a tendency towards lush, Hollywood-style production values. Remedy says that it wants Alan Wake to look like a HBO TV show, and their intentions are clear from the appearance of Pride Falls itself: it's a gloomy and highly atmospheric slice of backwater America, drenched in foreboding and sinister shadow.

Here, for once, it's a wise move to be scared of the dark, because these shadows are inherently linked to the evil power that's possessed the whole town. The enemies in Alan Wake take many forms, but all of them have one thing in common: they're bound together by shadows. Defeating these opponents is a two step process: use your torch or a similar device to drive the darkness from the body, then use your handgun to destroy the host. Well, that's certainly the process for defeating your human adversaries - the zombie-like locals who come at you with hatchets in their hands. Your other foes are a little... different.

You see, the malevolent spirits of Pride Falls have also started to inhabit inanimate objects. In what was shown at E3, this largely consisted of cars and, in one memorable case, a JCB - but it could potentially be anything. One minute it's a harmless vehicle, the next it's a phantom battering ram, rushing forward to crush your puny frame. In survival horror terms this looks to be something of a masterstroke, since you'll never be completely sure whether you're safe or not. Indeed, the whole light-and-dark motif has given Remedy the scope for a whole range of set pieces, like the cable car scene shown off during Microsoft's press conference: here Alan found himself isolated on a suspended platform as it crossed a pitch black ravine, armed with only a flare to stave off the strange bird-like creatures that harangued him from the air.

Frequently Alan will find himself desperately attempting to start up a generator (or another light source) while hoards of enemies bear down on his position. One such moment occurred right before the cable-car episode, as our hero attempts to start up an engine on a balcony overlooking the cliff. As he desperately fumbles with the machinery, the camera slowly pans around to reveal a huge crowd of armed nasties, edging ever closer towards his turned back. Given that I was watching this in a busy room full of journos, I found it to be a surprisingly tense moment - which surely bodes well for the final game.

This game has the best spooky trees we've seen in some time.

As you might expect from the developer of Max Payne, the combat is encouragingly meaty when it does kick off. The "one man versus the masses" atmosphere is faintly reminiscent of Resident Evil 4/5, but the movement of your foes seems slower, more deliberate - and as a result, more terrifying. Once again, the use of light is a key ingredient, with monsters screeching as Alan targets them with his torch before unleashing a volley of deafening gun shots. The game looks even better when Alan fires up a flare: the action segues into slow-motion, with enemies flaking into ash-confetti under a murderous red glare. Unlike Max Payne's bullet time, Alan Wake's slo-mo will be a purely stylistic feature, triggered by the game during certain moments of action. Provided it's not over-used, it should be a welcome touch.

While it's understandable that the shadow mechanics and innovative combat have been the main things to grab public attention, there are other neat little touches worthy of note. While your main objective in Wake is to find your wife, this task soon becomes aligned with a need to find the pages of your missing manuscript. As you come across pages in the game, Alan will read them aloud. As it turns out, they have a habit of describing really unpleasant things that are just about to happen. At one point in Remedy's demo, Alan is searching for a cop named Randy - a guy who'd previously promised to help him out. On his way to the rendezvous, he finds a page that describes him wailing in terror as he is attacked by an unknown creature; immediately the player knows that something really bad is lying in wait for them. Again, it's a fresh take on the classic survival horror formula.

While Remedy's E3 presentations have clearly answered a few questions (not least the one about whether this project was even happening anymore), there is still a lot of mystery surrounding Alan Wake. There's the car for one thing: it's not clear whether you can jump in at any time or whether you're limited to specific driving sections, but either way it's hardly natural territory for a survival horror game. Has Remedy found a way to make driving scary? It sounds like a tall order, but it's possible. It certainly seems unlikely that the driving is just in there to get you from A to be B.

One thing is already clear: Alan Wake has the potential to be one of the creepiest games of next year. Remedy's demo wrapped up with a highly satisfying cliffhanger: having caught up with Randy (or what's left of him), Alan is directed to a lighthouse on the edge of town where some of his pages can supposedly be found; Randy has hidden his part of the manuscript here, since its powerful beams will keep away the creatures of the night.

As Alan arrives at the lighthouse, he comments on how strange it is that such an isolated location should become a safe haven... and then suddenly the tower goes dark. It's a trap. Alan is trapped on a narrow peninsula, in the middle of nowhere, in the gloom. And then something emerges from the forest - perhaps the same something that was tormenting Randy: a colossal tornado of darkness, bearing down on the lighthouse with unstoppable force. It's a brilliant image for Remedy to leave with us, one that will skulk around in our memories until the day Alan's story continues. May it arrive swiftly.

Alan Wake will be released on Xbox 360 and PC in the spring of 2010.