Fatal Inertia is a futuristic hovercar racing game set in a 22nd century version of Earth. Wealthy corporations provide ships, hire racers, and let them race and fight each other for entertainment because people got bored with regular sports. The game provides six racing environments with 51 courses in total.
The ships are based around four classes (Phoenix, Aurora, Mercury, and Titan), each with their own statistics based on top speed, acceleration, handling, braking, mass, and strength. Each ship can be further customized through visual upgrades with emblems and paints, or technical upgrades through engines, brakes, hulls, wings, fronts, tails, side panels, cockpits, and spoilers. The weapons are non-lethal and make use of magnetic behaviour to hinder opponents. Racers can launch magnets to weigh down ships, which last over time and eventually overload the system causing it to explode. However, barrel rolls can be performed to shake them off. Magnets can also be launched as a cluster, along with other attacks like rockets that ignite the opponent's thrusters, force blasts that provide explosions, smoke bombs that create smoke screens, towlines that stick enemies together or anchor them to the terrain, and EMPs that disrupt magnets and shut down other crafts.
The courses include large natural environments with lush growth, many obstacles through natural formations and height differences. The course path is linear but often fairly wide, and the crafts need to go through barriers that act as checkpoints. When they are missed, a reset is needed and valuable time is lost. The time of day for each race can also be determined, with some courses having unique weather conditions.
The game features three leagues with sixteen racing series, different types of events like Combat Race, Knock Out, Velocity, and Magnet Mayhem, and multiplayer support for up to eight players.
The later released PlayStation 3 version is download-only and has a number of tweaks and additions, such as a training venue with new tracks, a tweaked difficulty level with a new Master difficulty, and various adjustments to the gameplay, weapons, and physics.