Two firefighters appear under Mr. Game & Watch and bounce him upwards using their trampoline. In Super Smash Bros. Brawl and Super Smash Bros. 4, the firefighters have a slight push effect around them. Mr. Game & Watch deals 6% damage and decent knockback on the way up before reaching the peak of his ascent and falling. Ironically, despite its name, the move does no flame damage.
At the peak of the jump, in Super Smash Bros. Melee, Mr. Game & Watch becomes helpless. Since Brawl, he instead opens a parachute to slow down his descent, allowing for much greater horizontal coverage for recoveries. The parachute can be canceled at any time by using any other move, but it won't be able to used again until after landing. The combination of this and his down aerial, which makes him plummet at a very high speed in contrast, gives him a unique movement option. If the parachute is canceled as soon as it opens at the peak of the ascent, he will fast-fall, allowing for mindgames.
In Ultimate, the move has been immensely buffed, as the initial windbox has been replaced with a frame 3 damaging hitbox (now giving it the fastest startup out of all of Mr. Game & Watch's attacks), giving him one of the best out of shield options in the entire game.
Special Move customization was added in Super Smash Bros. 4. These are the variations:
Fire is a Game & Watch game where the player takes the role of two firefighters trying to save people from a burning building. Various people jump out of various floors at various speeds, with the player's job being to use a trampoline to bounce them into the awaiting Ambulance on the other side of the screen.
The parachute introduced in Brawl as part of the move (also used in Melee as a neutral aerial) comes from the game Parachute, in which person in a rowboat tries to catch skydiving paratroopers from a helicopter to prevent them from falling into water.