Conceived in 1992 and originally announced in 1994,[3][4][5] the game was previewed and reviewed on multiple magazines but it was left unreleased after Atari Corporation discontinued the Jaguar and merged with JT Storage in 1996,[2][6][7] until it was licensed and published by Songbird Productions in 2000, a year after the system was declared as an open platform by Hasbro Interactive.

[10][11] Skyhammer is a shooter game, similar to G-Police, in which the player pilots the titular Skyhammer, a heavily armed aircraft and the action is strictly viewed within the cockpit in first-person, while combat in the game involves both dogfighting and dropping bombs against a variety of enemy aircraft, drones, gun turrets and tanks.

Mission mode is the default and main story mode of the game where across three cities (Jericho, San Diablo and Troy), each one having divided zones, the player (working for Cytox corporation) is assigned different types of missions to complete, such as retrieving either a lost computer or a data packet capsule, destroy a command tank from accessing the communication systems of Cytox, among others and by doing so, the player earn credits that can be spent on Cybermarts to buy upgrades to the Skyhammer aircraft, repair shields/damage and transfer from one zone of the city to another, in addition, the player receives update about a new mission to complete after clearing the previous one.

The main objective of the mode is to occupy zones from the rival corporations of Cytox (CIC and Grubertech) in order to fully control the city and advance to the next one.

In the 21st century, cyberspace was the declared as the legal equivalent of hardspace, where virtual people managed every decision-making worldwide but in 2012, hackers injected a virus into the computerized version of the stock market, resulting in the alteration of the virtual people and destroying multiple global financial structures systematically in the process, turning ownership unprovable and over the next ten years, corporate warfares increased to the point where citizens were forced to choose either corporate slavery or being outlaws and the rise of street gang cultures also brought danger into the combat zone on city centres, leading the government in neutron bombing corporate headquarters to regain its authority.

[13][15][14] When their freelance jobs roles began to expand and taking on more management responsibilities, they decided to establish the company in Oxford.

[13][15] Rebellion presented a 3D dragon flight game demo for the Atari Falcon,[14] which decipted dragons against vikings longships to directors at the publisher, including then-Atari UK CEO Bob Gleadow and Software Development Manager Alistair Bodin, who were seeking games for the then-upcoming Atari Jaguar.

Skyhammer was originally conceived by Chris Kingsley under the name Cyber Punk City in 1992, with the early design documents listing many of the gameplay elements that would be implemented into the final release but with a few changes made.

[3] The design documents also lists various elements that were either changed or scrapped altogether, such as enemies placed inside buildings or warehouses and support for a head-mounted display.

Eric Mylonas of GameFan gave the game a positive outlook, remarking that "While it doesn't feature incredibly blazing gameplay, it is decent fun.