Panic Breakout is an arcade game that plays like all other Breakout clones, but in GameDesign's version you are pressured to destroy all blocks as quickly as you can. Blocks are pushed downwards continuously, and the game ends immediately if you run out of balls to use or allow any block to cross the dashed line.

Left clicking releases all balls in your possession, and any balls still in play after you've completed a level will be carried forward to the next round. Bonus rounds appear every fifth stage as well, with the first type conferring bonus balls while the second reduces your spare ball count.

Power-ups include those that increases or reduces the size of the circle you are in control of, barriers, extra balls, and stars that boosts the travel speed of all balls.