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In Space Panic you've got good reason to panic, because you are surrounded by Space Monsters and all you've got is a shovel. Instead of banging the aliens on the head, which is what you would probably do if this situation were to actually happen in real life, you must dig holes, trap the monsters in the holes, and then fill the holes up, effectively dropping the monsters to their death.
Some of the monsters in this game must be dropped up to four levels at once to be killed. After you destroy all the monsters, you move on to the next level. The levels are a series of girders (platforms) connected by ladders. An oxygen bar stretches across the top of the playfield, letting you know how much time you've got to defeat the creeping, crawling monsters. The monsters come in three forms: red Creatures, blue Dons, and green Bosses.
Based on the 1980 Universal Arcade game, a round of Space Panic ends only when all of your spacemen have been killed. ~ Brett Alan Weiss, All Game Guide