Like its predecessor X-Out, Z-Out is a side-scrolling shoot 'em up. A horde of largely-organic enemies threaten the safety of your planet, and they must be destroyed over the course of six levels.There are power-ups available, but the game is less centered around these than some are.
Whilst some shoot 'em ups are much easier with a second player, Z-Out takes design steps to legislate against this. In a 2-player game, most power-ups are unavailable, and even those which are only come into effect on level 3. Another variation is that the 1-player mode uses restart points, but the 2-player mode does not, so as to keep both players in the same place.