The player controls Pengo the penguin attempting to navigate an ice world full of enemies called Sno-Bees. Pressing the lone action button while facing an ice block will cause Pengo to push forward the block, which will slide until it hits a wall or another ice block. The ice block will also crush any Sno-Bees in the line of trajectory. Crushing multiple Sno-Bees at once will increase the number of points awarded.
There are a total of sixteen levels, which repeat in order after completing the sixteenth level.
As the player dispatches enemies, new Sno-Bees hatch from eggs located within other ice blocks within the level. Eggs can be eliminated by crushing the ice blocks that contain them. At the beginning of each new level, the ice blocks with eggs within them will momentarily flash a color showing the level of Sno-Bee inside. Pengo can briefly stun Sno-Bees by pushing a side wall, causing the water to ripple. This stun will only effect adjacent Sno-Bees to the player character. When stunned the Sno-Bees can be run over by Pengo. Each level ends when all Sno-Bees have been eliminated.
Diamond blocks located within the level are unbreakable. When diamond blocks are oriented into a vertical or horizontal line the player is awarded 5,000 to 10,000 bonus points depending on whether the line is against a wall or not. The alignment of the diamond blocks will also temporarily stun all Sno-Bees within the level.
When 60 seconds have elapsed in a round without the player dying, the game enters into a sudden death mode; the music speeds up and the movement speed of the Sno-Bees increases.
- The points award for crushing Sno-Bees is dependant on the number crushed in one push of an ice block:
400 points for 1 Sno-Bee
1,600 points for 2 Sno-Bees
3,200 points for 3 Sno-Bees
6,400 points for 4 Sno-Bees
100 points for walking over a stunned Sno-Bee
10,000 points for aligning the three diamond blocks together if at least one is not touching a wall, but only 5,000 if all are against the walls.
30 pointe for crushing an ice block or 500 points if the ice block contains a Sno-Bee egg.
- A bonus is awarded for time left after completion of a round:
5,000 points for under 20 seconds
2,000 points for between 20–29 seconds
1,000 points for between 30–39 seconds
500 points for between 40–49 seconds
10 points for between 50–59 seconds
0 points for 60 seconds or more
An extra life is awarded at 30,000 points
World Record High Score
According to Twin Galaxies the world record score for Pengo is held by Rodney Day from Canberra, Australia. His score of 1,110,370 points was set on August 13, 1983.
The credits can be displayed by holding both joysticks up, pressing both action buttons and pressing one start game button at the same time while the game is in "Attract Mode"