Before playing, set up the game as follows:
- Gather Forces: The players reveal their squads and gather all of the ships, cards, and other components necessary for their squads. Each ship in the squad must have the correct plastic ship, ship token, maneuver dial, Ship card, and any Upgrade cards chosen, as well as ID tokens if necessary.
- Determine Initiative: The player with the lowest squad point total chooses which player has initiative. If players are tied, the players randomly determine which player chooses who has initiative.
- Establish Play Area: Establish a 3' x 3' (0.9144 m) play area (or alternative size) on a flat surface such as a table or playmat.
- Place Obstacles: Starting with the player with initiative, each player chooses one obstacle token from the obstacles available and places it in the play area. The players place a total of six obstacle tokens. Obstacles cannot be placed at Range 1 of each other, or at Range 1–2 of an edge of the play area. After the sixth obstacle is placed, the player who does not have initiative chooses an edge of the play area to be his own; his opponent’s edge is the opposite side of the play area.
- Place Forces: The players place their ships into the play area in order from lowest pilot skill to highest pilot skill. If multiple ships tie in pilot skill, the player with initiative places his ships with that pilot skill first. Ships must be placed within Range 1 of their player’s edge.
- Activate Shields: Place a number of shield tokens on each Ship card equal to that card’s shield value.
- Prepare Other Components: Shuffle the Damage deck and place it facedown outside the play area within reach of both players along with the maneuver templates, dice, range ruler, and the remaining tokens.