HAL Laboratory developed the NES game while SRD worked on the arcade version. After both versions were completed, SRD wondered why the NES version had the Balloon Fighter moving more smoothly, and asked now Nintendo president Satoru Iwata for advise (at the time he worked at HAL). Iwata suggested that instead of just calculating the character's movements using integers, they could also calculate the movements by using decimal points. After Shigeru Miyamoto learned that SRD went to another company to figure how to make a game run smoothly, he asked "why do you have to go to another company to find this stuff out?"
Very much like the NES counterpart, you play as the nameless Balloon Fighter and must pop the balloons of the enemies. Once you defeat all the enemies on the screen, you progress to the next phase. The entire time, you must also be careful, so that you don't fall into the water, get both of your balloons popped, or get electrocuted. After every three phases, you go to a bonus stage, where you must catch twenty balloons that float out of pipes before they float away past the ceiling. However, a unique feature of this game are the tall, scrolling levels. The game can be played with two players, with each player getting their own screen due to the nature of the Vs. Dualsystem. The owner of the system can change some dip switch settings in order to change things such as flight speed, enemy regeneration rate, and the number of starting lives.
If you stay on a stage for too long, at first lightning strikes will send bouncing sparks around the stage, but if you wait much longer, an arrow will be shot at the player from off-screen, immediately popping both of your balloons and causing you to lose a life if it isn't dodged.
While most Vs. System games only require one set of six interchangeable ROM chips to play a game, this game requires twelve chips because of the dual-screen feature.