Irrational Games’ creative director and co-founder Ken Levine once said that BioShock is defined by worlds that are simultaneously both fantastical and ridiculous, yet strangely grounded and believable.

This is certainly an apt description of the ten or so minutes of gameplay footage publisher 2K presented to us at this year’s E3, although I’d add “wondrous”, “bizarre” and “menacing” to it.

Forsaking 1960s Rapture in favour of the floating city of Columbia at the turn of the 20th century, BioShock’s new setting is much brighter, more open and far more colourful than that of the previous games. The steampunk art style and antiseptic environments do an excellent job of evoking 1912 World’s Fair-era America, with propaganda posters and odd contraptions littering the landscape.

Columbia was launched by the US government as a symbol of its power and to function as a utopia of sorts, but turned out to be a heavily-armed battleship, at which time it was disavowed by the US. Its whereabouts is now unknown to almost all, and the ship itself has collapsed into a state of civil war fuelled by competing political persuasions and personal ambitions.

The player controls disgraced Pinkerton Booker DeWitt, now a detective-for-hire who is contracted by an unknown individual to scour the dystopic Columbia for a young woman named Elizabeth. A key player in the war who has been held prisoner for the last 12 years and whose warden is a giant robot raven-like creature named Songbird, Elizabeth is a young woman on the run. Her relationship with Songbird is akin to that between a battered woman and abusive husband, with Songbird designed to feel utter betrayal and volcanic rage should Elizabeth ever attempt to leave him.

Indeed, partway through the ten or so minutes of gameplay footage we saw, Elizabeth pleads with Booker never to let Songbird take her again, placing his hand around her throat to signal that if it comes to that she would rather die, even by his hand.

The footage took place about a third of the way through the game, and found Booker and Elizabeth taking refuge in an abandoned gift shop full of strange masks and other miscellaneous collectibles. Some lovely lighting effects were present – the shop was dusty and dimly lit, but when Booker eased a curtain to one side and peeked out, light flooded in. As he explored the darkened corners of the store, small moments gave insight into the character’s personalities. Elizabeth playfully donned an Abe Lincoln mask and danced, her cartoonish proportions, simple features and child-like mannerisms highlighted her innocence and fragility, while Booker’s gruff dialogue and insistence on staying on task revealed his seriousness and determination.

Amongst the detritus he found a pistol, but then an icy shriek signalled the arrival of Songbird, who ripped a large hole in a wall and scanned the room for his companion. The parallels between him and the Big Daddy characters of the other BioShock titles are obvious.

The score swelled as he paused, towering over the two protagonists who cowered unseen behind a box, before leaving with a clattering of mechanical parts. Screams and explosions followed, and Booker emerges to find that the creature has laid waste to the immediate area, burning buildings and cleaving a horse in half in the process. Here we see one of Elizabeth’s unique abilities as she kneels over the dying animal, attempting to open a tear in the fabric of time/space to restore it to full health. Her powers are formidable but she has not yet mastered their control and things distort wildly before we are plunged into the 1980s in a graphically spectacular effect.

Our heroes find themselves standing in the middle of the road, a cinema showing “Revenge of the Jedi” to their right and police cars around. Elizabeth struggles against the tear and finally closes it just prior to being run down by a truck, and we’re back in Columbia.

The pair then explore the area, walking down a lane where we hear a man abusing then shooting his wife in a nearby tenement, and past some surly NPCs into an expansive courtyard.

Zeppelins float nearby and overhead, and some kind of protest is going on. Flags are burning and a man is about to be executed by an assembled and angry mob. Stepping in, Booker is recognised and attacked while a man runs to a giant steampunk gramophone-like device and cranks a handle, which sounds an alarm. Booker kills him while Elizabeth uses her ability to bring anachronistic weapons into this reality such as turrets. She also warns Booker of incoming enemies, who by now is using his skyhook, three spinning hooks which attach to his wrist and allow him to melee enemies or travel at high speed around hanging rails which transport cargo around Columbia – a tactic enemies also employ.

Using this rail system, Booker reaches a Zeppelin and swings inside before killing the crew using a freeze ability and shotgun, then plummeting a few hundred metres back to Columbia, catching his hook on a rail at the last moment and shooting along at terminal velocity. A firework signal flare explodes in the sky and suddenly Songbird is back. He tosses Booker through a wall then pins him, eyes red and ablaze, and is posed to finish him off with one giant clawed foot when Elizabeth intervenes, pleading for the detective’s life.

The bird’s giant eyes slowly change colour back to blue as Elizabeth says she is sorry and that she’ll go back with him, and the demo’s final shot is a slow motion pass of her - face streaked with tears and arm stretched out towards Booker – as her guardian whisks her away into the sky.

Needless to say, the game looks terrific, and despite the circus-like 'follow the yellow brick road down the rabbit hole' setting, all the BioShock tropes seem in place – great characterisation, an engaging story, varied combat, political themes and despite the brightness, some real horror. Songbird’s arrival is utterly frightening, and the world has a twisted, nightmarish quality and slow-burn dread that it conveys without resorting to showing headless corpses hanging from trees or other cheap shortcuts.

Irrational Games has not committed to including a multiplayer element within the game, but have confirmed that it will support the Move. One of the best gameplay demos at E3, this snippet could not have made us more excited for the release of this title in mid-2012.