In the game, the player assumes the role of a green-haired boxer, known by three initials the player chooses when the game begins. During matches, the player's boxer is viewed from behind as a wireframe (so the opponents can be seen). The player must time his punches, dodges and blocks in order to defeat the opposing boxer. Hints are given as to the opponents next move by subtle eye changes (the white of the eyes turn from white to yellow), but the player must ultimately predict what moves the opponent will make and react appropriately.
Once the player defeats the last opponent, the opponents repeat. On each successive round the opponents are harder and quicker. The player only has one round to land a KO. Technically, there is no TKO element for multiple knockdowns, but the "3 knockdown rule" is utilized nonetheless; no boxer ever gets up from his third knockdown. Additionally, a win by decision is not possible; an automatic loss occurs if time runs out. In the event the player loses, the computer controlled victor will taunt the player and the corner man for the player will try to entice the player to play again ("Come on, stand up and fight!") via the game's distinctive digitized speech. Players are only allowed one continue per play through. Like many games made during the Golden Age of Arcade Games, there is no actual ending and continuously loops until the player loses.
The game is a modified upright, and was unusual in that it requires two monitors, one atop the other, for the game's display. The top monitor is used to display statistics while the bottom one is the main game display (similar to Nintendo's Multi-Screen Game & Watch titles and the Nintendo DS). Apart from this, the game is more or a less a standard upright. The game has a joystick and three buttons. Two buttons control left and right punches, one for each arm (denoted by "Left!", or "Right!" when hitting the head, or "body blow!" when hitting the body with either arm). A large button on the console is pressed to deliver an uppercut or right hook, though the blow can be delivered only if a certain number of normal punches are landed on the opponent, so that the "KO" indicator on the display reads full. When the indicator reads full, it flashes and the corner man's digitized speech encourages the player to either "Put him away!", or "Knock him out!".
Source: Wikipedia, "Punch-Out!! (arcade game)", available under the CC-BY-SA License.