Elite is a free-form space trading and combat simulation, commonly considered the progenitor of this sub-genre. The player initially controls a character referred to as "Commander Jameson", starting at Lave Station with 100 credits and a lightly armed trading ship called Cobra Mark III. Most of the game consists of traveling to various star systems, trading with their inhabitants, gaining money and reputation. Money can also be gained by other means beside trading, these include undertaking military missions, bounty hunting, asteroid mining, and even piracy. As the player character earns money, he becomes able to upgrade his ships with enhancements such as better weapons, shields, increased cargo capacity, an automated docking system, etc.

The game utilizes pseudo-3D wire-frame graphics, its world is viewed from a first-person perspective. It has no overarching story, though a race known as Thargoids play the role of antagonists: their ships will often attack the player-controlled ship, forcing the player to engage in space combat. Combat is action-oriented, taking place in the same environment as the exploration. The player must use various weapons the ship is equipped with, as well as manoeuvre the ship, trying to dodge enemy attacks. The player can also choose to attack neutral ships, doing so will decrease the protagonist's reputation, eventually attracting the attention of the galactic police.

Elite is notable for its expansive game world, consisting of eight galaxies and 256 planets. The player is free to travel to any of these planets, provided his ship has enough fuel for the trip (the ship's fuel capacity is limited for a journey to the distance of seven light years).

A 128 only, updated version released in 1998 added features such as an autopilot (as an alternative to the docking computer), the ability to sell ship equipment, an Identification Friend or Foe (IFF) system and special cargo contracts.