Why should anyone be interested in a sequel to Saints Row when GTA 4 is looming ominously over the horizon? That's the question all gangster sandbox fans will be asking themselves, now that THQ has lifted the lid on Saints Row 2. We sought the answer to this question and many others during our first-look at a pre-alpha build of the game in London. You'll be surprised by our findings.

Instead of shirking the question, lead designer Greg Donovan was happy to tackle it head on. "The only thing I know about GTA is what I've read," he explains in front of the assembled European press. "From what I've read it seems like they're going in a more realistic direction. For us it's more about almost a hyper-realistic quality, over-the-top, all about these memorable moments, very compelling gameplay and frankly we wouldn't be releasing this year if we didn't think it would be competitive."

A bold claim indeed. To think that Saints Row 2, the sequel to the rather surprisingly excellent Saints Row, will compete with the sales behemoth that GTA 4 promises to be demonstrates either extreme confidence or blind stupidity. Remember, the original SR filled the next-gen gangster vacuum following last-gen's San Andreas. This time it's different. This time SR2 is going toe to toe in a rude-boy blinged-up deathmatch. This time there's pressure.

"I think coop is a huge distinguishing factor," says Greg. "Unless they are really holding something, I don't think they are. I think that's a big step, a plus for us. We also remember that SR1 was the first one to do competitive multi play - we're going to continue to blow that out as well."

Fighting talk. That's what we like. But we haven't even set one foot outside our drug den. Let's back up a bit and delve a little deeper into the changes the development team has implemented into the city of Stillwater.

At the beginning of the game the player wakes up from a coma in a prison infirmary, having miraculously survived the boat explosion from the end of SR. You're not sure what's going on at first. Things have changed. You discover that three completely new gangs moved in on Stillwater when the Saints disbanded, and you come to learn that the reason you were in a coma in the first place is because you were betrayed by one of your own. You're charged with rebuilding the Saints and reclaiming Stillwater as the head of the gang. "In SR you were a passive member of the gang," explains Greg. "In SR2 you are the angry leader. You're in charge. You're giving the orders."

Immediately we get a sense that SR2 will be a much darker and sinister game than its predecessor, dealing with revenge, anger and brutality on a much greater scale than SR. Fans of the first game will know that part of its charm centred on its light-heartedness. While it makes sense for SR2 to be a darker game, since it's a tale of revenge, we'll have to wait and see whether the bleaker tone makes for a better game.

After the background check we're shown SR2's character customisation, a huge leap forward from the previous game. You can now create a female character, something that wasn't in the last game. You can customise your race, masculinity and femininity, build and age, and choose from six different voices. You can affect the personality of your character by tinkering with their emote animations, all of which will affect the way people react to you in-game (we weren't told how). You can pick from a huge selection of walks, including the "South London Bop" as I like to call it. There are tonnes of "compliments", including the salute and thumbs up, and taunts, including giving the finger, chest bump, neck slice and "the wanker". Not all of these are available at the beginning of the game - some need to be unlocked as you progress. This mid-game customisation takes place at Stillwater's plastic surgery, appropriately enough.

We're told that every single piece of clothing you see in the game can be worn. That gives SR2 500 individual pieces of clothing, not counting colour changes. You can even set your own melee style. Indeed each of the three new gangs has its own distinct melee attack, which you can assimilate into your own selection as you defeat them.

You'll get to use numerous vehicles, on land, sea and in the air.

The gangs, as well as your crib, can be fully customised too. This time there are nine cribs compared with SR1's three. At the beginning of the game your crib will be a run down piece of crap. We saw gang members moping about downstairs, sitting on worn out couches and overturned crates. But, as you'd expect, the more powerful the Saints become, the better your crib becomes. You're able to customise individual elements as well as the overall appearance (from three levels - cheap, classy and ultra modern). As you build up "respect" you'll be able to increase the rank of your homies, making them much stronger in combat. During our demo we purchased a home theatre set, pool tables and, of course, a stripper pole. And sure enough a stripper started sliding up and down, catching the eye of most of the gang loitering about our crib.

Style plays an important part in the game. As your style increases, through the purchase of more expensive clothes, you'll gain more respect. Respect is the currency you then use to purchase missions. The more money you spend on pimping your crib, the easier it will be to gain respect and unlock new stuff to do in Stillwater. In your crib you'll be able to save pre-sets in the wardrobe, perhaps a pirate theme for example. This makes for quick and easy dressing of the main character.

It's clear that Volition has ramped the customisation up for the sequel. It's even included vehicle performance customisation, a first for the series. But will this alone be enough to prize gamers' fingertips from the streets of Liberty City?

It doesn't look as good as GTA 4, but it has its own style.

Stillwater itself has received a facelift. It's now roughly 45 per cent bigger than in the first game, with six completely new districts (the team started development on SR2 before the first game shipped). Our demo takes us through a mission in one of the new districts - Trailer Park. Here we get a taste for how the combat has been improved. This mission, or stronghold as they're called in the game, involved fighting an enemy gang called the Sons of Samedi, a Caribbean gang that concentrates on dealing drugs. You can now zoom in to an over the shoulder Resident Evil 4 style view point to improve your accuracy. This is important, because head shots, nut shots and the like will give you more respect.

At one point our demo our guy grabs an innocent bystander and uses him as a human shield, slowing him down but providing moveable cover. The police won't shoot if you have a human shield, but enemy gang members will - "they're more brutal" says Greg. But you can be brutal too. Once our demo guy is done with the human shield he executes him with a shot to the head from point blank range. Ouch.

We then get a chance to see how satchel charges, one of a number of new weapons, work. Essentially they're remote sticky grenades which you can set off at any time. They stick to people, cars, anything with geometry. Our demo dude lobs one at a fleeing gang member, waits for him to get near a bunch of his buddies then triggers the charge. Boom.

Back on mission, we're told that the point of this carnage is to destroy three specific drug labs masquerading as trailers. Our demo guy sticks a satchel to the bonnet of a car, jumps in and drives straight towards the final trailer. Just before it's about to hit he jumps out, Lethal Weapon style, and triggers the satchel. The car explodes just as it hits the trailer. It never stood a chance.

This kill, called driver bailout, demonstrates the new diversion system. You'll earn respect and money for fancy kills, elaborate play and anything you do that's out of the ordinary. They won't be signposted - it will be up to the player to trigger the diversion system by experimenting in the game world. This is represented on the HUD by stars which appear on the top right of the screen when you show skill and ingenuity with the combat or driving. The driver bailout, for example, rewards two stars. Another example, we're told, is vehicle surfing. Others will be for gang kills and brutality. The point is to "divert" players off the beaten path. "It's about incentivising the player to explore the world and try stuff out," says Greg.

As our demo comes to an end we're still left with many unanswered questions. We haven't been shown the co-op, although we do know the entire campaign will be playable on XBL and PSN and will have a seamless drop in and out system. THQ is also keeping quiet on the online competitive multiplayer. "We're not releasing finite details on that yet," says Greg. "What we are saying is that SR1 showed us where we needed to go and we're going in that direction. Successful competitive multi play is taking elements of the single-player and applying them to the competitive multiplayer. For us that means elements like activities and missions, ambient systems, so that's kind of the direction we're going. It isn't your typical deathmatch, put it that way!"

Use bystanders as human shields for extra safety

Saints Row 2 won't win any graphics awards, that's for sure. Indeed, compared with GTA 4, which Rockstar has taken in a more realistic direction, some gamers will say it looks poor. But in some ways that's the point. SR2 has a hyper real, almost cartoon look. Your character's run animation is exaggerated to the point of hilarity and bodies fly about comically. While there are elements of a dynamic environment - a certain district will catch fire midway through the game based on player actions - there won't be destructible environments. This comic feel may end up being one of SR2's strengths, and may make it attractive to some gamers who are perhaps put off by GTA 4's more serious slant (there may be one or two of you).

This feeling is reinforced by the inclusion of "fantasy" vehicles in SR2, the like of which have been removed for GTA 4. In SR2 you'll have access to jets, fighter planes and choppers, as well as water crafts, jet skis and boats. Sweet.

We're reassured that the plan is to make both the Xbox 360 and PS3 versions of the game identical, despite the 360 version being the lead platform. The team is still discussing whether to make the downloadable content for both versions different, but as far as features go "360 and PS3 will be the same". You'll be able to use the Sixaxis' motion sensing technology to control vehicles though - "for flying it works well," Greg says.

We leave the demo feeling that SR2 will have a much harder time standing out this time around. Back in September 2006 SR was the only next-gen gangster sandbox on the block. At the time of writing we have no idea when in 2008 SR2 will be hitting stores. It's conceivable that gamers will be too busy tearing up Liberty City to bother with Stillwater. It may be a shame, because SR2 looks like it'll be a complete blast when it comes out. And although we know next to nothing about the multiplayer side of things, we know next to nothing about how multiplayer will work in GTA 4, too. This may be a battleground where the open world epic is won or lost. Only time will tell.