Development for Masters of Teräs Käsi was handled internally at LucasArts. It was the first PlayStation title for the company, which presented challenges. Industrial Light & Magic assisted with motion capture, used for character animations. While spirits were high during the development and promotion of Masters of Teräs Käsi, the game was met with widespread criticism since its release. Criticisms range from a flimsy story to poor fighting mechanics.
Star Wars: Masters of Teräs Käsi is a fighting game with a 3D gameplay element. The player is able to move their character not only forwards and back using the left and right, but can sidestep by using the up and down on the controller. There are three ways to achieve a win: knocking out the opponent, forcing the opponent out of the ring, or having the most health when time runs out. Rounds are timed, and the player must win two of three rounds to be declared the winner of the match.
Characters have an array of melee moves and also a few ranged attacks. The Force does not make an appearance in the game in the traditional sense. Instead, each character builds up a meter as they fight. The player can execute special moves related to the strength of the meter, which can unleash increasingly devastating attacks. In the game's story mode the player selects a character and then fights through a series of opponents in a tournament setting. Upon victory in the tournament players receive a full motion video (FMV) ending for that particular character.
Masters of Teräs Käsi features a relatively simple story for a Star Wars title. The events take place between the Star Wars movies A New Hope and The Empire Strikes Back. The destruction of the Death Star at the hands of Luke Skywalker has severely crippled the Galactic Empire. The Emperor seeks retaliation against Skywalker and the Rebel Alliance. He recruits the services of the mysterious assassin Arden Lyn to eliminate the Alliance's key members. Luke and the others discover the Empire's plot and challenge Arden, face to face, in the art of Teräs Käsi, an unarmed combat discipline. This pits the rebels in one-on-one fights against the Empire's elite warriors.
^a Unlockable character