Chuck Greene, in his striking yellow motocross body armour, sits revving the Chainsaw Bike. It's aptly named - two chainsaws protrude sideways from its handlebars. Ahead of him, packed into the narrow, neon lit Fortune City strip, stand 7,000 zombies. 7,000. There is no room for them to do that sluggish zombie stagger thing zombies love to do. Their moans and groans are almost deafening, filling the air, drowning out the beeps and woops of nearby casino slot machines. And yet, there is something of a quiet moment, a calm before the storm, an exciting anticipation. Everyone knows what's supposed to happen next, but just how it will happen, well... it's going to be messy.

Dan Brady, CEO and General Manager of Canadian developer Blue Castle Games, knows he has the assembled throng at Capcom's annual showcase event, Captivate, in the palm of his hand. But there's also room for an Xbox 360 controller. The executive producer on Dead Rising 2, the sequel to Capcom's superb 2006 zombie kill-em-up, is expertly delivering a cleverly crafted live gameplay demo. It began with 1,000 zombies filling the strip - twice that of the original. Then 2,000. Now, with Dead Rising's new hero sitting pretty on the sure to be indulgent Chainsaw Bike, an eye-watering 7,000 zombies, 14 times the number that appeared on screen at any one time in Dead Rising 1, blot out the horizon. He drives forward...

Zombies fly in every direction, left, right, up, down. New procedural cutting technology fuels the gruesomely realistic splitting of undead flesh. The camera is covered in blood - it's hard to see what's going on, but then, when you think about it, so it should be. It's almost hilarious to watch Dan cut the hapless zombies to ribbons, their dying urks comical, the sound of spraying blood farcical. Dan powerslides as he gets to the end of the strip, turns around and drives forward again. The street is so dense with zombie that Chuck and his Chainsaw Bike are almost lost in the mix. It is an astonishing sight. It is hard to convey just how, well... nuts it all is.

"That is what Dead Rising 2 is all about," says Dan as he brings the demo to a close. "It's about more zombies. It's about anything and everything as a weapon. It's about taking the chaos of Dead Rising 1 to a completely different level while still preserving the sense of humour that made that first game so special and so unique."

Meet Chuck Greene, DR2's main man.

Let's talk about that first game for a second. Developed internally at Capcom Japan and released exclusively for the Xbox 360 in 2006, Dead Rising was one of the first games that actually felt "next-gen". A lot of that had to do with the whopping 500 zombies that photojournalist Frank West battled against at any one time, but really it was more about the core mechanic of the game - being able to use pretty much anything as a weapon against the zombie horde. This, coupled with a unique 72-hour completion countdown and the mini-sandbox shopping mall setting, led some fans to reckon it was the best Capcom game for years.

Internally, however, Capcom knew it could do better. Speaking alongside Dan at Captivate, legendary Mega Man creator and research and development head honcho Keiji Inafune, who is also producing DR2, is frank in this regard.

"It was always the basic goal to create a global product," Inafune explains. "Something that would stand on its own on a worldwide scale. But when we showed it off to Japanese publishers and developers a lot of them said, wow, that's a really good Western game that you've created. You must have a lot of really good foreign staff working at Capcom Japan.

"At that time there was no greater compliment than to have my peers in Japan look at the game and think it was a Western game, because that was always the goal. However, when I took it to the other side of the ocean and showed it to some Western developers and publishers, I was shocked to hear most of them say, yeah it looks Western on the outside but on the inside it still seems Japanese, there's still something very Japanese about it.

"What that basically meant was we missed our mark in shooting for something that was truly Western. It was at that point that, even though we had done our best, I realised that the next logical step in the evolution of this series was to use a Western studio to try and realise that goal."

Hence Dan Brady and Blue Castle Games, a studio Capcom "stumbled upon". "In discussions with them," Inafune continues, "there was one thing in particular that Dan said. He said what makes Dead Rising 1 so great is the fact that it does feel a little Japanese. It's not 100 per cent a Western game. That echoed Capcom's sentiments. We want to understand that style, we want to learn from them, but on the other hand Blue Castle Games wanted to learn the Japanese style. So it was the perfect mix. It just felt right."

The game is set in Fortune City, clearly inspired by Las Vegas.

So, DR2 will undoubtedly feel more Western, but how that manifests itself in actual gameplay is the key question that needs to be answered. From the gameplay demo a number of marked differences can be determined, chief of these is weapon firing. Chuck grabs a machine gun and strafe fires from a third-person, over the shoulder perspective. "Obviously that was strafing with the gun, something Dead Rising 1 didn't have at all," Dan says as his targeting reticule brings a gory end to zombie after zombie after zombie. "I know a lot of people who played Dead Rising 1, they enjoyed the katana, but what they really wanted was a gun that wasn't going to be annoying. These are the kind of changes we're doing this year. We're not trying to reinvent the game. But it's something we're doing to make it an even more fun sandbox."

Purists concerned that Blue Castle might be infecting the core Dead Rising experience with an evil Western design philosophy need not worry - if nothing else the gameplay demo shows that Blue Castle's creating something that will be instantly familiar. As well as retaining the third-person hack-em-up gameplay (with prettier graphics, of course), the developer clearly gets the dark Dead Rising humour from the first game. At one point in the demo Chuck walks into a nearby casino, grabs a guitar and proceeds to knock lumps out of nearby zombies - with every smack a heavy guitar riff plays. Then a baseball bat, a chair, a roulette wheel, a till register... each one sees Chuck move and swing differently; each one has its own comical impact sound.

Later, Chuck grabs a moose head, complete with antlers (Blue Castle is a Canadian developer after all), puts it on, then charges bull-like down the strip, swinging his head to the left and right and knocking zombies off their feet. "In Dead Rising 1 you could wear a dress," Dan says, "but that wasn't that much fun. Now we have the idea of clothing being weapons." He grabs a propane tank covered in spikes, sticks it on a zombie's head, moves a safe distance then lets off some machine gun rounds - boom.

Killing zombies with bikes is always fun

Then he grabs the Drill Bucket, something that's guaranteed to go down in video game weapon history as one of the most outrageous ever created. In wonderful 'does exactly what it says on the tin' fashion, Chuck slams it on a zombie's head then watches as a drill sound pierces the air and the bucket carves into flesh and skull, eventually decapitating its victim. It gets better. The Paddle Saw - a chainsaw strapped to both ends of a paddle - sees Chuck swing and move forward as if rowing through a river of zombies, their blood splattering like rapids against rock.

While the sheer number of zombies on screen will grab the headlines, perhaps even more impressive is the new procedural cutting technology. Dan shows this off best with a sword: Chuck carves zombies like slicing meat. Where he slices, flesh actually tears. Limps fly off, torsos detach horizontally. Best of all though, is a downward slice, which results in a zombie peeling apart from the head down to, well, his nether regions, the blood spilling as if being sprayed from a fire hose. It's a juvenile thing to be impressed by, but then, Dead Rising has always been about those over-the-top, too silly to be taken seriously thrills.

The thing about the procedural cutting is it's not limited to swords, or indeed occasions when Chuck is up against only a few zombies. It applies to every weapon, including the Chainsaw Bike, and every situation. So, as he was driving up and down the strip, carving thousands of zombies into little pieces, the procedural cutting was still working - where the chainsaw cuts, the zombies split apart, even when it's happening to ten of them a second.

With Dan's demo over, questions are fielded, and it's no surprise to find that most focus on the actual mechanics of the game, given that Capcom has revealed so little. Multiplayer is "one thing that we have the best intentions of getting in to the game", according to Inafune, as is weapon breaking. It'll have a 72-hour survival mechanic, too, like the first game, and the reason for it "relates directly to the story".

There will be blood

Speaking of the story, there's very little info, but what we do know, from the official blurb, is that the game is set several years since the Wilamette incident, in the Vegas-style Fortune City. While Frank stopped the zombie apocalypse, he couldn't prevent outbreaks from happening throughout the US. Replacing Frank is "handyman" Chuck Greene, a former national Motocross champion. Before he hit the big time with a team and sponsorship behind him, Chuck was forced to repair his own bikes, leaving him incredibly resourceful. He's a single father, too, and dotes on his daughter Katey. Oh, and according to Inafune,"you can expect there to be a system in the game that is based on his profession, his ability," in the same way that Frank took pictures in Dead Rising.

Remember the Drill Bucket? Of course you do. Doesn't sound like something someone would have absent-mindedly left on the street in the middle of a zombie invasion, does it? No, of course not. Someone must have made it. "Unfortunately at this event we don't want to delve into any depth for any of the in-game systems," Inafune says, "but we can say that if you look at the demo and the trailer there are a lot of nice juicy hints about how the gameplay is going to be carried out. It's awfully strange to have a bucket with three drills already shoved into the bucket! That's probably a hint in of itself!" With Chuck being "a real handyman", expect some kind of weapon crafting feature.

One of the biggest complaints players had with the first game was the punishing save system. So, all eyes are on the save system this time around. "I don't know if everybody didn't like it," counters Dan. "I don't know if that's true. I think it's polarising, though. If you look at the forums and actually read what the fans of the game said, for every one person who hated it there was probably one person who actually liked the idea - it created a sense of dread for the character. Rest assured we're going to fix the problems that were there. Literally it was a problem where you could save the game and not finish the game. For want of a better way of putting it, that was crap. Now we are fixing it, for sure, but we're actually trying to come up with some devices that help preserve the sense of dread at the same time, while making sure it's not as frustrating as Dead Rising 1. We're trying to come up with a hybrid system that's an awful lot more flexible and won't annoy the users."

Dan's demo has certainly left its mark - it's hard not to be impressed by the sheer technical prowess on display, as well as the complete and utter madness. But, as Inafune repeatedly insists during the presentation, it's not enough to simply up the zombie count and expect that to do all the work for you. It's about how Blue Castle uses its undeniable technical proficiency to create killer gameplay.

Dead Rising 2 looks fantastic - we can't wait for E3.

"When we made the announcement trailer for the original Dead Rising," Inafune says, "it showed Frank standing on top of a car surrounded by almost a sea of zombies. But if you played the original game there was no situation where you were surrounded by that many zombies because of technical limitations we had at the time. However, with Dead Rising 2 we are more than capable of generating a scene like that in the game, and probably even more than what you saw in that video, probably double that number.

"When you think about it, it's not that increasing the number of zombies is instantly going to make the game that much more fun, but it does open up a lot of possibilities with game design and what you can do. Watching Chuck on the motorcycle with double chainsaws zipping through what is comparable to a Japanese train packed full of people, and just cutting them down one by one, it really, really feels great. And it's only possible thanks to the sheer number of zombies they've been able to put on screen at one time."

This is the crux. The game will live or die not by the zombie count, but by how Blue Castle utilises it. While the developer and Capcom are keeping their cards close to their chests - expect more from E3 - the potential is clear for all to see. For now though, enjoy the thought of mowing down 7,000 zombies with a Chainsaw Bike. That's enough to keep any Dead Rising fan going.

Dead Rising 2 is in development for the Xbox 360, PlayStation 3 and PC. No release date has been announced.