The game is essentially an isometric beat-em-up, although Jackson attacks with magic powers instead of physical contact, and has the ability to shoot magic power at enemies instead of getting close enough for a melee attack. A map of the stage is shown before it begins, and after which, Jackson must get from the start to the end without losing all his health, rescuing all the children and defeating all the enemies along the way.
The game can also be played multiplayer; if the cabinet supports it, up to three people can play simultaneously. All three players play as Jackson, dressed in his suit from the "Smooth Criminal" music video. The first player wears a white suit and hat, with a blue shirt; the second player's character dons a scarlet outfit with a black shirt; the third player's character is dressed in black, with a red shirt. The characters all have armbands: red for black outfit, black for red outfit, and blue for white outfit.
Dance Magic: Arguably the most memorable feature, Sega takes the concept of the "smart bomb" or "screen zapper" and changes it to the form of dancing, in a special attack termed "Dance Magic". Once activated, a heavenly spotlight shines on the player, and the player starts to dance several of the high-energy moves that have become Jackson's hallmarks. All of the standard enemies - henchmen, gangsters, guards, robots - start dancing with the player and are destroyed at the end of the dance routine (ostensibly because they cannot keep up with Jackson's dance moves). However, bosses do not dance, but do take a significant amount of damage. Any captive children on-screen at the time Dance Magic is activated are not harmed. There are three different dance routines that may be performed, and the player starts with one to three of these attacks per credit (depending on how the machine is set up).
Bubbles: Part of the peculiarity of this game comes from this unusual power-up. Bubbles the chimpanzee, Michael's real-life pet, appears in each level. Once collected or rescued, the chimp transforms Michael into a robotic version of the pop singer that has the ability to shoot laser bursts and absorb significantly more damage.
1. Cavern: This level resembles a subterranean hideout and consists of long corridors with blue doors periodically. It starts with Mr. Big taunting Michael. The enemies consist of suit-wearing henchmen and small robotic mobile gun emplacements. There is no boss.
Background music � "Bad"
2. Amusement Quarter: This level takes place in a nightclub and highly resembles the first level from the console version. Additionally, half of the level takes place outside on a street during daytime. The enemies consist of suit-wearing henchmen, and soldiers. The bosses for this level are two mobile robotic gun emplacements.
Background music � "Smooth Criminal"
3. Night Street: This level is very similar to the outdoor half of the Amusement Quarter, but takes place at night. The gangsters and soldiers again make their appearance in this level, but are joined by many more robots. There are robots that hide under manholes, large conspicuous-looking AT-ST-like robots, and shirtless men who control armored dobermans. Mr. Big confronts Michael in this level, in the form of a laser-shooting hovercraft surrounded by eight floating laser pods.
Background music � "Beat It"
4. Graveyard: In an almost complete departure in theme, this level takes place and has all the common elements of a horror movie graveyard. Enemies consist mostly of zombies and ghosts. The boss is yet another Mr. Big contraption; a large stationary three-tubed ghost generator.
Background music � "Another Part of Me", although one would logically think that "Thriller" would be more appropriate given the setting of the level. However, Thriller is used as the music for the Dance Magic attack in that level.
5. Evil Fortress: This level takes place on Mr. Big's fortress on the moon, where he is preparing to fire a large laser cannon. Almost the entire level takes place on a rising elevator, where wave after wave of enemies appear. The last boss is Mr. Big piloting a large mechanical spider.
Background music � a reprise of "Bad"