X-Com: Enemy Unknown is one of my favourite games of all time. It's a stone-cold classic, a UFO-battling strategy title that features base-building, resource management, and tense field missions where your entire squad can be wiped out in seconds. It's about 16 years old now - the gaming equivalent of a smelly old dog, one with doddery legs who does terrible farts, but whom you love dearly anyway. The graphics look like cave paintings by today's standards, but time has done nothing to dent the brilliance of the core gameplay. In fact, I'd rather play Enemy Unknown than a lot of the stuff I've seen at E3. I'm deadly serious.

When I heard that 2K Marin was planning to bring the X-Com brand back from the dead, mysteriously removing the hyphen in the process, I wasn't sure how to feel. As much as I love it when old franchises make a successful comeback, the hard truth is that these revivals often fail - and when they do, your shared history makes the whole thing bitterly painful. It's like meeting up with your childhood sweetheart, going in for a nostalgic snog, and then her being violently sick into your mouth (for the record, this has never actually happened to me).

In any case, the short story is that I had my doubts about 2K Marin's XCOM, despite the developer's well-established pedigree. But now, having sat through an oh-so-short demo of the some early code, I could scarcely be more excited. Along with the 3DS, XCOM has been the highlight of my E3; I've still got one day left to go, but if anything else catches my attention in this way, I'll be delighted and surprised in equal measure.

The new game is a first-person shooter outing, casting the player in the role of Special Agent William Carter. The setting is 1950s America, and after discovering an alien artefact in as-yet unrevealed circumstances, Carter has been tasked with setting up and running XCOM - a government agency that aims to counter the growing UFO threat. While the majority of the action seems to consist of field outings, conducted in familiar FPS style, between missions you'll have to make decisions that affect the development and performance of your organisation.

2K's demo kicked off with the player arriving back at the XCOM HQ, stepping out of a vintage car into a busy-looking hangar packed with crates. As we approached the base entrance several staff underlings popped up to give Carter brief reports and updates; one woman mentioned that the head of research had requested his presence in the lab. Further into the building we came to a large room dominated by a map of America. This, it turns out, is effectively the mission select screen. XCOM isn't large enough to fight every battle on every front, so it falls to Carter to decide where the team prioritizes its efforts. Each mission affects the base in a different way: rescue outings are important for maintaining public support, while other trips might help your team to conduct research or to gather supplies like Elerium - the alien element that powers some of the game's strongest weaponry. You can't afford to neglect any of these considerations, but there isn't time to answer every call - so when you ignore one task in favour of another, it might have disappeared from the map by the time you get back.

Before heading out for the demo mission, we headed down to XCOM's research department to collect a new toy. This area resembled a cross between Q's hideout in a James Bond film, and something you might expect to find in Half Life. The chief scientist shows off a new weapon that resembled a glass flask filled with black goo; when hurled at a test dummy, the container exploded into a shower of flames. Devices like these can only be discovered if you've made the effort to gather evidence and alien materials from alien encounters, and even then you'll have to be sparing in the use of these advanced gadgets, as ammo is limited. Carter can manually change his load-out by visiting the armoury, where weapons sit ready and waiting on wooden wracks. For the demo mission, the player chose a pump-action shotgun and a lightning-spewing prototype gun.

After heading back to the map in the main room, the player was presented with a choice of three assignments, each taking place in a different US State. The E3 demonstrator chose to undertake a rescue mission in California; someone handed over a typed briefing - a held, in-game object rather than a menu screen - while we listened to an accompanying recording of the initial distress call: a terrified young woman babbling down the line before screaming and being suddenly cut-off. The voice acting here was excellent, recalling the drama and overall quality of the audio logs in BioShock. There was clearly no time to waste, so the player headed back to their car at the entrance to the base, where two other agents were already waiting.

Oddly enough, the action that followed was initially quite reminiscent of that bit in Modern Warfare 2 where you fight the Russians in a leafy American suburb. The player showed up in a quaint looking street of low-rise houses, all decked out in a vibrant colour scheme that makes everything look a bit kitsch. There didn't appear to be anyone about at first, but the peace was suddenly disturbed by the sound of someone screaming for help. Carter and his two buddies headed into a yard, stumbling across a damaged kennel, covered in black slime, and the ravaged remains of a dog. A few seconds later, they discovered the smouldering corpse of a man, also covered in the gloop. At the prompting of one of the other agents, Carter takes a photo of the victim - evidence that will assist researchers back at the XCOM labs.

It didn't take long before we caught our first glimpse of the aliens themselves - large blobs of black pus, rolling around in the street. Despite the player's efforts to blast them with his shotgun, the goo-bags proved to be quite nimble, avoiding Carter's shots and causing him to damage several nearby vehicles. We gave chase down the road, towards the open door of another house... and at that point things started to get really grim.

As we approached the home, a man in a white shirt stumbled out, burbled a desperate plea for help, and then vomited his guts onto the driveway. It was at this point that I finally understood what 2K is going for with the bright colours and borderline-cute stylings: it's supposed to look a bit quaint and safe, because that way you get a much greater impact when the nastiness starts. The developers go to great lengths to recreate the cosy, idealistic stereotype of 50s America, and then they smash it to bits with a big Alien hammer. The combat that followed the death of Mr Whiteshirt was utterly chaotic, as Carter and his chums chased the blobs through the interior of the wrecked home. It felt a lot like the wanton carnage of the Ghostbusters films, only it wasn't remotely funny. In fact, it was really quite disturbing.

While a lot of the atmosphere stemmed from the trashed, blood-splattered ruin of the home itself, it was the blobs that really stole the show. An awful lot of sci-fi games simply give us aliens that look a bit like humans, only slightly different. The blobs, by contrast, felt really otherworldly - with that freaky otherness quality that Silent Hill does so well. As the blobs were zapped and blasted, their inky substance was sprayed all over the surrounding scenery. After being badly wounded they then seemed to grow a pair of white lung-like organs which began to madly pump and throb; as this happened, the creature began to re-form itself, with streams of black liquid slithering along the ground to join the main body. At this point the other two field agents started yelling at Carter to finish the creature off. The only way to definitively kill the blobs, it would seem, is to target the white lungs: a successful hit here punctures the organ, causing white gas to spray out into the room with a loud hiss. It's a deeply odd sight, and it looks horrible.

The four or five blobs in the house put up quite a fight, but eventually Carter and his colleagues were able to put them down for good - allowing them to proceed upstairs to find the lone, terrified survivor, who was immediately evacuated. The mission appeared to be over, but this wasn't quite the case - because in XCOM, you've also got to leave the area once a job is completed. What with this being an E3 demo and all, I figured that something pretty big was going to happen on the way back to the car - bigger, at any rate, than one of the agents simply saying, "Ooh, that was scary, wasn't it? Oh well, job done. Shall we go get a McDonalds?"

As Carter and his pals headed downstairs, a sudden force caused every window in the house to smash. Stepping out into the garden, we soon caught sight of something strange in the air - a swirling, invisible vortex, sucking up nearby rocks and crackling with blue electricity. A simple column-like shape appeared in the middle of this anomaly, followed by several other shapes that span around and shifted formation to form something resembling a spoked wheel. And then it attacked - blasting Carter's two colleagues with some kind of ray that made them disintegrate into white ash. The player dashed down the road, desperately letting rip with the shotgun, to no apparent effect. The alien craft had morphed into two concentric rings by this point, and it appeared to be gaining on the player. The ship began to charge up for another devastating attack, and then...

And then the demo ended, leaving me with a smile on my face and a whole bunch of questions. Unfortunately there was no time for a Q and A session, and as soon as the presentation ended we were herded out of the booth. I did, however, manage to fire one question at the presenter from 2K: Is it possible to save the two field agents, or were their deaths a scripted event?

"The mission outcome is always based on how you play," came the cryptic reply. I pressed the developer again, but he merely smiled and repeated his answer, word for word. It was an infuriating end to the session, although appropriately enough I felt a bit like Fox Mulder attempting to squeeze information out of a shady Government operative. No matter. For now, I'm deeply impressed with what I've seen of XCOM - and when the opportunity presents itself, you can believe that I'll be pushing hard for answers. Remember kids, the truth is out there.

XCOM is due for release on Xbox 360 and PC in 2011