Unlike a typical pinball machine where plungers are used to score points upon impact with bumpers, three balls are issued per game which are meant to be dropped into sinkholes on the board marked by stand-ups of Muppet characters. Spelling out M-U-P-P-E-T-S generates a "Super Jackpot Bonus." Character voices were used as "call outs" during gameplay.
In 2010, Sharpe's son Josh explained the game's failure to launch in the newsgroup rec.games.pinball:
“Originally the game was a 3 ball game, and before each ball one of the characters would blink. If you landed in the blinking character's hole for that ball, you would add a letter in M-U-P-P-E-T-S towards the Jackpot, which was a progressive ticket payout. Throughout the testing process, we found a lot of people didn't understand that pinball was a 3-ball game. A TON of kids would start a game, plunge a ball, see that no tickets came out, and walked away.
After seeing how often that happened, the game was changed quite a bit. It became a 1-ball game, with the scoring of holes replaced as
pure ticket values. The jackpot was now moved to the hole on the bottom. They also added in skill-posts via a button on the lockdown
bar. Press the button and 6 skill posts would pop up at various positions around the playfield, stopping a ball from falling in a hole
closer to the top...
The game ended up being a mechanical nightmare. The ball lift to serve the ball into the plunger lane malfunctioned all the time. The skill posts required a certain amount of time to reset and be fired again, so there was alot of button pounding that didn't correspond to when the posts shot up. The game choreography (speech call outs, music progression for each ball, etc) were all designed around this 3 ball game that had a start/middle/end, based on the characters saying certain things when they were lit for the MUPPET letter versus not...
We all weren't thrilled with the design changes, because it sort of took the 'pinball' feel out of the game. Eventually the test game was
pulled, and it slowly got cannibalized for parts.[1]”