Xybots is a sci-fi shooter with pseudo-3D environments explored from a third-person perspective. The game can be played by one or two players; the two-player mode takes place on a split screen. The hero(es) must move through a series of Gauntlet-style underground mazes, killing the bad guys and collecting health and other bonuses from flying saucers. It's designed to be played co-operatively, although bullets from one player can harm the other.

In Xybots, the players must travel through a 3D maze and fight against a series of robots known as the Xybots whose mission is to destroy all mankind. The first player is "Major Rock Hardy" while the second player is "Captain Ace Gunn", but their abilities are virtually identical other than movement speed.