Many Sega arcade games were flagrant rip-offs of American movies. Laser Ghost was Sega's attempt to channel Ghostbusters into a shooting gallery game. This is a little unusual considering they released a properly licensed Ghostbusters game for the Genesis around the same time, but perhaps the rights for an arcade tie-in were still owned by Data East, who had published The Real Ghostbusters three years before.
Anyway, in Laser Ghost, up to three players are guided through a ruined city, vaguely similar to New York City, as they fight off cartoonish ghost creatures. The impetus for this crusade, beyond the ghosts tearing everything apart, is a kidnapped little blond girl, who was probably modeled after the child from the Poltergeist movies. In essence, it's the humorous predecessor to The House of the Dead. (To be fair, The House of the Dead is hilarious for its own reasons, albeit unintentionally.)
It is a legitimately funny game with lots of ridiculous creatures. In the first stage, you cruise down the highway and face off against ghost cars. The area ends when you come across a movie theater, and the faces on the marquee begin to attack you. The second stage takes you through a fancy restaurant, where the ghost waiters accost you with pigs and lobsters. Later areas take you away from urban environments to a haunted ghost ship, where you're assault by evil seagulls. The final battle takes place against a mutated version of the girl you're supposed to be saving, but after pummeling her with lasers, she falls over, turns back to normal, and apparently everything is okay!
The shooting is fairly standard, with unlimited regular bullets and a limited number of special shots to clear everything on the screen. Compared to Line of Fire, another gallery shooter released the same year, it's not nearly as graphically impressive, eschewing the 3D scaling effects for most of the game, except for a few brief segments. This is mostly because the game runs on the weaker System 18, rather than the System X. The graphical appeal instead lies on the ghost designs, which are goofily amusing.
The real appeal of Laser Ghost lies in the lasers, as referenced in the game title. The arcade machine features practical effects using lights and mirrors to reflect a light onto the window mounted to the top of your gun, making it look like you're targeting with a laser. (Here's a video of it in action.) Unfortunately this is one of those effects that's simply impossible to reproduce with emulation. In principle, it's a lot cooler than the visible targeting reticules of Terminator 2, and it's an improvement over Line of Fire, which didn't feature any kind of reticule at all.
Sega released a version of Laser Ghost for the Sega Master System in PAL territories and Brazil. It borrows the shooting gallery concept, but the rest of the game is original. Instead of patrolling a city, you're protecting a little girl named Catherine, presumably the same one as in the arcade game, as she wanders through a haunted mansion. She's attacked by ghosts and other flying paraphernalia, and you need to shoot it down before it hits her and depletes her life.
It's a cool idea, but the hit detection is completely terrible. You might shoot something several times and not have it register at all. Thankfully, Catherine has a sizable life bar, so there's plenty of room for error. You can choose to play solely with the Control Pad, or use the Light Phaser in conjunction with the Control Pad, which uses the screen clearing special attack. It's a short, sloppy and ultimately insubstantial game, especially compared to better, earlier SMS titles like Rescue Mission.