The game's title and box art are based on the folktale Chicken Little or Henny Penny. However, the game program does not reflect this outside of the falling objects loosely resembling apples, and it is a simple clone of the arcade game Avalanche.
Players control three white bars, in which to catch the falling objects. As the game progresses, the bars decrease in number until there is just one left. Players are allowed to miss three times before the game is over.
The Sky is Falling is played with "paddle" controllers.