I've always found the term "dungeon crawler" to be a bit misleading. Maybe this just says something about me, but I've always thought it sounded like slang for someone who spends their days perusing the dirtiest porn cellars in Soho. Alternatively, a "dungeon crawler" could be the name for a baby conceived in medieval captivity - as in, "Forsooth my lord! The guards from the Black Helm report that Cedric The Virile has spawned another dungeon crawler."

Of course, we know that the "crawler" bit usually denotes a simple, slightly mindless jaunt through a sprawling fantasy environment, beset by swarms of enemies. Dungeon crawlers occupy a space at the action-heavy end of the RPG spectrum, a place where narrative and dialogue is far less important than the need to chop a goblin's face off. Frantic action is the principle ingredient, and so the case is with Hunted: The Demon's Forge, the new game from Bethesda and InXile. It's a third-person hack-and-slash affair, starring a lithe and rather sexed-up huntress, and her meaty muscle-bound partner. Swords plunge into torsos, icy magic freezes enemies solid, and, in one stand-out execution sequence, an arrow lodges itself in the eye socket of a mortally wounded demon.

In fact, action is so much a key part of Hunted that at first glance it's Gears of War that springs to mind as a reference point, rather than the likes of Dungeon Siege or Diablo II. Fine, so we're very much in the realm of beards and pointy ears, but there's an undeniable familiarity in the cover-to-cover system, with characters ducking out from behind stone barriers to launch projectiles at the advancing hoards. Combat itself feels meaty, to the extent that even bow attacks make a heavy whistling noise that sounds a bit like a silenced firearm. The Gears comparison is further helped by the fact that the game is using the Unreal engine - and to rather nice effect, too.

Hunted is the tale of two mercenaries: the foxy E'lara, a slender killer who loves her work, and Caddoc, her massive, slap-headed partner in crime. E'lara seems more geared towards archery while Caddoc appears to be the up-close-and-personal, pull-out-their-lungs type, but both characters can use a mixture of ranged, melee and magical attacks. At the start of the game a spirit named Seraphine asks the pair to investigate the nearby town of Dyfed; when they finally get there, it turns out that the locals have been turned into toothy demonic buggers with a penchant for ripping people's faces off. E'lara and Caddoc then investigate the mystery in the only way they know how: by violently killing everyone they meet.

That's pretty much all we know about the plot for now. It may sound like a relatively by-the-numbers setup, but Brian Fargo, the man behind InXile, is a name associated with some of the most important titles in the history of Western RPGs - Fallout, Baldur's Gate and Icewind Dale, to name but three. In other words, there'll probably be a bit more to it. Besides, this is a dungeon crawler: it's the action that we're really interested in, remember? And in the case of Hunted, the action comes with a specific focus on co-op play.

InXile says that Hunted has been built from the ground up with co-op in mind, and on the basis of the early preview code I was shown last month, it certainly seems that the developer has put a fair bit of thought into this aspect. For a start it seems that it's tried to do away with the tethering that exists in many co-op ventures. You and you partner are welcome to stay close, of course, but if you'd rather fight battles far apart, the game will support that too. If one of you should happen to get knocked out, for example, your buddy can revive you by lobbing an item at you from a distance - you don't have to perform a mad dash across the room to perform virtual CPR. On the other hand, there's plenty of scope for combining skills and special attacks. E'lara might douse a group of foes with ice arrows, allowing Caddoc to bowl in and smash them with something heavy and sharp. Or perhaps Caddoc might levitate the badguys via a spot of izzy-wizzy-lets-get-busy, allowing E'lara an easy shot from the other side of a chamber.

Naturally these kind of tactics will be easier to carry out with the help of a sentient partner - another human, ideally, or a particularly smart chimp, if you have access to your uncle's test lab. InXile is promising that the AI will do a neat job of supporting you if you happen to be a Billy No Mates (or a caveman with no broadband connection), but it still seems quite apparent that Hunted will work best with a flesh and blood ally. To this end, the developers are offering a comprehensive set of tools to help you find a suitable team-mate, allowing you to specify exactly what you're looking for. If you have a particular yearning to play as E'lara, you'll be able to seek out someone who is happy to stick with Caddoc for the duration of play.

Another nice touch is the fact that any experience earned in a co-op venture will be duplicated and given to both participants. If Pythagoras hosts a game and invites his chum Archimedes, both players will be allowed to fully customise and upgrade their character for the duration of the session. Then, when Archimedes logs off to watch Come Dine With Me, Pythagoras will be able to re-tweak the character his friend used; Maybe Archimedes spent a load of upgrade points on Caddoc's melee moves, but Pythagoras would rather invest in magical attacks. In short, co-op work will help you to progress through the campaign, but it won't result in someone else messing up your skill trees. Oh, and when Archimedes logs into their own game, any XP they earned in the joint session will be carried over to their account.

Confused? You may well be, as that wasn't the clearest explanation, but essentially the upshot is that co-op play is designed to be mutually beneficial. Elsewhere the game design seems to be packed with welcome if familiar features. There are environmental puzzles to solve that yield secrets and alternate routes, and InXile says that a minority of these will be extremely tricky - the kind of thing that only select players will solve. There are optional cinematic executions to carry out on dazed enemies, and larger bosses that have to be despatched using quick time finishers that involve both players. There will also be opportunities to use the scenery to take down tough foes: one highlight of the demo found Caddoc and E'lara collapsing a massive stone archway onto a siege weapon that was keeping them pinned behind cover.

It's early days yet for Hunted, but graphically the game is already looking pretty solid. The demo I watched was only using placeholder audio for the dialogue, but suggested there'll be plenty of back-and-forth banter between the two characters; hopefully this will eventually help to give Caddoc and E'lara a bit more depth, because at the moment they feel a bit derivative. Still, to repeat myself for the hundredth time, this is a dungeon crawler. It's the success of the clobbering that will ultimately make or break the game, and Hunted certainly seems to have potential in this regard. Last month's presentation was the first time that Bethesda and InXile have shown off their new project, but hopefully it won't be too long before we're given a longer, more in-depth gander.