PHM Pegasus is a Commodore 64 game that combines simulation and action elements. You control a naval hydrofoil missile boat, tasked with completing various missions. These missions can range from destroying enemy vessels in a specific area to conducting surveillance without sinking the ships, or escorting supply ships through hostile territory.
The gameplay involves navigating through different scenarios, each with its own objectives and challenges. As you complete missions successfully, you earn points that determine your rank, which can progress from deck mopper to admiral. Each mission is independent of the others, allowing you to choose which ones to play in any order. Some missions also feature additional craft that you can control to aid you in completing the objectives.
A time compression mode is available, enabling you to speed up or slow down the gameplay to suit your preference. This feature allows for more control over the action sequences and can be used to reduce waiting times or increase the challenge level.