Quoted from Roostking:
What about 3 players. Beginning of game the software randomly picks 2 on 1 scenario.
OK OK, here is how it works...
There are 2 co op modes. "Co Op Mode" and "Team Vs. Mode".
The first thing you do to activate these modes is press and hold the start button when adding player 1. This will start the standard co op mode and will flash it up on the LCD. This mode is everyone vs the machine. If you want to do team vs mode, you press and hold the start button again until the screen says Team Vs. Mode. Then you must add all 4 players. This mode links players 1 and 3 together and 2 and 4 together. If you launch the ball without 4 players added to the game, it will default back to standard co op mode. You can also toggle between the 2 modes before starting the game by pressing and holding the start button before you launch the first ball.
Hope that makes sense.