Bethesda has announced Hunted: The Demon Forge, a co-op hack and slash game for PC, PS3 and Xbox 360 and which is being developed by Brian Fargo's inXile Studios.

InXile is mostly known for a spate of iPhone games such as Fantastic Contraption in recent years, but follow the history back far enough and you see there might be reason to get excited. Fargo himself is a well known name in RPG circles, having worked on A Bard's Tale, Baldur's Gate and Fallout.

Hunted: The Demon Forge will have more of an action focus though, judging from the look we had at it a few weeks ago. It's a very traditional style of co-op hack and slash that gives players two characters to choose from; a burly man with a sword and an elf with a bow and little more than nipple-armour.

The game itself involves the adventurers working their way through all sorts of beasties and bandits in a search for wealth and power, with brutal finishing moves and combat playing a big role. Players can choose to play as either Caddoc (burly man) or Elara (elf girl), with either an AI or real-world ally hoping in to fill the empty space.

There's the usual options to upgrade your characters as you move through the game too, unlocking new spells and combos as you plough a route through zombies and dragons. Some of the spells we got a chance to see in action included lightning and fireball attacks, but Fargo promises there's lots more to be unveiled yet. Either way, the game looks to be very much a retro-styled dungeon crawler.

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