X-Out is a horizontally scrolling shoot-'em-up. Unlike most comparable games, the game is not set in outer space or even in the air - instead, the fight between good and evil is underwater.
The player must navigate through five levels, blasting countless enemies along the way. Each level features a mid-level boss and an end-level boss, which must be defeated to progress. After completing a level, the player can purchase new weapons or customize their ship by placing them anywhere on it.