Ubiquitous in Shoot Em Ups although appearing in other genres too, this is the screen-clearing nuclear panic button that gives you a moment of respite from relentless alien attacks and prolific Mook Makers. However, these are extremely rare, making them for emergency use only; in many games, you get two or three per life or per game. Some give you one every so many points. Some are available as a Power-Up.
It goes by many names, but it's most commonly referred to as the Smart Bomb, since it's apparently smart enough to destroy every enemy on screen while leaving your own ship, gunbuddies, allies, and friendly structures untouched.
Players might find these Too Awesome to Use.
Compare Invincibility Power-Up, the usual Platform Game counterpart. Not to be confused with Logic Bomb, which is completely different.
The real-life weapons of the same name bear little resemblance to this definition. In fact, they're almost the opposite, designed to only kill what you aim them at and not anything else.
Gradius's blue capsules activate as soon as you pick them up.
Other games have the "Mega Crush", when you pick up enough power ups.
Interestingly, Parodius has two varieties of smart bomb: the screen-flashing blue capsules of Gradius, and a one-use giant shockwave attack that can be gained by picking up a blue bell. The former has an instant effect and only works on normal enemies, while latter takes a second to engulf the screen and damages bosses as well.
Geometry Wars has one, which is so powerful it wipes out the background grid and even kills the soundtrack for a moment. The PC clone Grid Wars is much more punishing, as it resets your score multiplier every time you use one.
Smart Bombs also exist in Star Fox, although the name varies. They were called Nova Bombs in the original (and did not home in on a target, but instead simply destroy near-everything around them by sheer explosive force), Smart Bombs in Star Fox 64, and simply Bombs in the most recent games.
In many of the Metroid games, you got the Power Bombs as a late-game upgrade. Their range is more than the entire screen (in both the 2D and 3D games), and you can easily get more by killing enemies (by, say, bombing). Fusion variety also has the benefit of gathering any released parasites from the destroyed enemies where the bomb was initially set for easy absorption.
The Giga Crush in Mega Man ZX Advent. Probably also its precursor, the Giga attack of the Mega Man X series.
ZX Advent actually has a use for it, in the sense that killing certain bosses with it alone is required for 100% Completion.
They have 'em in Typer Shark. Very useful when the piranha are getting a little too numerous.
Some Capcom games, such as 1942 and Black Tiger, have POW items that, when picked up, destroy all enemies on the screen.
The potions in Gauntlet and Golden Axe can do this, depending on the toughness of the enemies (and the player's magic level in the former).
Early Castlevanias had this in the form of a rosario (fancy name for a rosary), but it's a Power-Up Letdown, as it goes off when you touch them, and they almost always appear where there are just a couple enemies you can easily whip out of the way.
In Castlevania: Lament of Innocence, you can play as one of the bosses as a bonus player. When you choose him, all the rosario items change to bloody skulls, since he is a vampire.
The Touhou games have them and call them spellcards, though they're often just called bombs. They also have counterbombs, which allow you to save yourself from the brink of death by bombing right after getting hit. The eighth game, Imperishable Night, steps it up with "Last Spells" (also known as "deathbombs"), basically giving you an extremely powerful, very long lasting attack at the expense of two bomb units in a sort of Big Damn Heroes moment (though normal counterbombing is still present).
Of note is that, with the exception of Mountain of Faith, they tend to be very, very different depending on the chosen shottype. Imperishable Night, for example, has eight different bomb types, ranging from orbs that wipe everything in the screen, a narrow Wave Motion Gun that lasts for a good five seconds, a series of screen-wide slashes that instantly destroy everything, or lots of knives thrown at every single enemy in the screen.
The classic arcade game Tempest has a Super Zapper which destroys every enemy on the screen. The player gets three per level.
The Giga Wave Cannons of R-Type Final aren't as much Smart Bombs as they are Wave Motion Guns that wipe out everything on a full charge. The game also gives all ships a Smart Bomb attack if they hit enough enemies or enemy fire with the Force.
In the last Darius game, G-Darius, the smart bombs that you need have been replaced by Capture Balls. These balls capture your average Mecha-Mooks and use them to assist you in battle until they're destroyed. The best part? There are two further uses of these mooks: They can either be blown apart like your standard Smart Bomb (with larger enemies having bigger explosions), or cooler yet, absorbed so you can perform a Wave Motion Gun all by yourself! It gets better; bosses can perform their WMG too, in which you can Button Mash against it (or use the rapid fire button) so your WMG can grow larger, inflicting more damage. A boss spams this attack, only to die beautifully seconds later, in fact.
The Guardian Legend features Enemy Erasers, which do this. Later in the game, they start becoming fairly regular drops from enemies - your cue that survival will rely heavily on spamming them in later stages.
Unless you're using Power Style, in which case you forgo smart bombs in favor of a "Boost" fire mode.
Raptor: Call of the Shadows has these, with a twist: like all of the equipment you can pick up during a mission, you can also buy them between missions with the money you earn. You can carry up to five at a time. They're not hugely expensive; in the late game, it's not unreasonable to buy as many as you can carry and expend them all during the mission.
Unlike most Smartbombs, the Raptor smartbomb takes a few moments to reach the center of the screen and detonate, so you have to use it carefully. This also means it takes longer to detonate if you're near the edge of the screen.
In Rez, smart bombs are called Overdrives. Rather than a bomb, they function as an auto-targeting version of the player's standard laser that destroys as much as it can for around 5 seconds. While certainly doing a lot of damage to bosses and the like, they work better for when you're overwhelmed by enemies or missiles.
Dangun Feveron has a decidedly hilarious smart bomb, which serves to complement the game's disco motif- it literally blasts every enemy onscreen with the power of disco, visually conveyed as a stream of silhouetted dancers.
Tiger Heli had bombs that would clear a large radius around your helicopter. If you had any whenever you got hit, they would automatically dispatch to protect you.
These show up in both The Lost Vikings games every now and then. Most are found in hidden areas.
In Mushihime-sama Futari Black Label, using Smart Bombs comes with a nasty penalty: your counter drops by about 6,000-7,000, as opposed to the 2,000 or so you'd lose by dying, so by firing bombs to save your life, you can easily destroy three stages' worth of counter buildup. So unless you're good enough to 1LC the game, it's either play for survival and run your counter into the ground, or play for score and not get very far (especially in Original difficulty, where the counter also serves as an indicator of the game's Dynamic Difficulty).
Crystal Quest reproachfully calls any use of its Smart Bomb "using an anti-aircraft gun to kill a mosquito." (A de Havilland Mosquito, maybe...)
EVE Online has "smartbombs" of a sort... while not a nuclear panic button, they radiate an omnidirectional pulse of EM/Gravitons/explosion/whatever that most players in PvP use to kill other players' drones. You can also use them to kill other people, but nobody does this unless the other person is in a frigate (usually the weakest combat ship in the game) or if you're griefing people in a crowded area like Jita.
Exceptions to this rule generally qualify as crowning moments of awesome/funny, like when eight battleships destroyed a fleet of nearly fifty enemy ships after luring them into a smartbomb disco party.
Fury3 had the FFF in weapons slot 7. You could only have one at a time, but it destroyed (or heavily damaged) everything onscreen and in the immediate area (including stuff you would prefer to not destroy), and would also refill your ship's health to full.
In Cho Ren Sha 68k, the "Bomber" item not only does heavily damage to all enemies on the screen, but instantly removes all enemy bullets as well, a la Touhou and similar Bullet Hell games. This one also heavily averts the Too Awesome to Use issue, since not only are your bombs wasted if you die while holding them (especially if you have more than 3, since each new life resets you to 3 bombs), but one bomb is worth significantly less than your life. They can be earned from the fairly frequent power-up rings, only worth 20,000 points each at the end of the level as opposed to the 50,000 points that your shield and/or lives are worth each. Extra lives are extremely rare as well, and best not wasted, especially because continuing after aGame Overforces you to restart the level and resets your score to zero.
Startropics had the Spiked Shoes, despite being a Zelda-esque game. When using these, Mike teleports around the room and kicks every enemy.
The arcade version of both, Shinobi and Shadow Dancer, gives player Ninjutsu techniques that could only be used once per life on each stage (usually). While each of the Ninjutsu techniques has a different visual effect (such as summoning lightning bolts or tornadoes), they all serve the same function in wiping all on-screen enemies. Although, the Master System port of Shinobi did add a few new Ninjutsu techniques that had other purposes besides killing enemies.
The Genesis sequels, The Revenge of Shinobi and Shinobi III, has the Mijin no Jutsu, which allows the player to damage all on-screen enemies at the expense of one life. This technique can even be used when the player is already on the verge of death, allowing him to revive with a full heath gauge in the same exact spot where he died instead of restarting from the last checkpoint. However, when the player uses the Mijin no Jutsu on his last life, it will result in an instant Game Over.
In Starcraft II, the Xel'naga Artifact in "All In", the last mission of the Terran campaign, functions like this in that it incinerates every Zerg unit a good ways around when activated. It can only fire every 210 seconds at the fastest, so make every use count. That said, if you have a charge ready, you can use it to punch a hole through to Kerrigan if she's coming your way.
Heavy Weapon has your character's Nuke weapon that kills everything on the screen except for bosses, who take lots of damage. Comes coupled with a nice nuclear explosion in the background!
CAUTION: You're not the only ones with Smart Bombs! There's a regular Mook that can drop Atomic Bombs on you- if these touch the ground before you shoot them down, you're toast no matter how strong your Deflector Shields are!
In Legacy Of The Wizard, monsters may randomly drop a cross. Picking up a cross kills all enemies in the area.
In Blazing Lazers, one type of weapon powerup can be fired on. After cycling through several types, it will turn into a flashing pink orb, which when collected will damage all enemies on screen and give the player an extra respawn.
Contra III: The Alien Wars introduced bombs that could be stock-up and use at anytime to wipe out all on-screen enemies, a feature that was carried over to Contra: Hard Corps. Before that, the arcade version of Super Contra had Mega Shells that served the same purpose, but those could only be used in overhead stages.
The Noose in Fester's Quest. "You rang?" BOOM.
Superbombs in Beat Hazard work almost the same as traditional smart bombs, in that they release a dense, circular spread of high-powered bullets from your ship as opposed to just instant death/damage to everything on screen. While that will do the job for a swarm of low-powered enemy ships, the bullets from superbombs don't travel THROUGH anything, meaning anything hiding behind a tougher ship (or, annoyingly, snakes) won't take any damage at all. However, they do fulfill the "momentary respite" part of a traditional smart bomb, as setting one off will make your ship invulnerable for a few seconds regardless of what the bullets hit.
Thunder Cross has a variant of this with the three special weapons (Napalm, Flame and Laser). Collecting one of these makes all four of your options into special ones capable of using a powerful, screen-damaging attack... for about 10 uses. And then you can just pick up another power-up containing them again.
Scrolls in Soulcaster deal massive damage to all nearby enemies. They're a good panic button in case you get surrounded.
Tutankham gave the player a limited supply of flash bombs to clear the screen of enemies when the Mook Makers got too active.
Descent has Smart Missiles, which are homing missiles that detonate into a group of homing plasma bolts. This has the net effect of wiping out most enemies around you regardless of where you fire them. Of course, one of the bosses will use them against you. The Earthshaker missile in the second game is basically a Smart Missile turned Up to Eleven, and yes, the Final Boss uses them against you.
In Hellsinker all characters have one (Kagura even has four) that can be launched if you have 3 or higher SOL power. If you have 5 SOL, then they will launch a more powerful version of the bomb.
There is also the Solidstate mode where if you have 3 or more SOL then it will clear the screen right away for a while if you are hit. However you can only have 3 solidstates per stage and in the Shrine of Farewell they are disabled all together.
TNT charges in the original Jazz Jackrabbit instantly deal 2 hit-points of damage to all enemies and destructibles on the visible screen and approximately half a screen further in all directions. This includes activating checkpoints and shield/weapon monitors.
In Kickle Cubicle, touching a Power Rock will freeze every enemy on the screen that Kickle could otherwise freeze one at a time. This is not as useful as it sounds.
In the first Streets of Rage game, the "Special" button allowed the player to call in fire support. A squad car pulls up and a police officer pops out with a heavy weapon: For player one, he fires a bazooka that creates a ring of fire; for player two, he fires a minigun that sends down a rain of bullets. Either weapon immediately clears the screen of mooks and knocks off a large chunk of health from bosses.
Mega Flare in the Kingdom Hearts series is more or less this, launching a fireball that creates an explosion generally huge enough to wipe out or heavily damage every enemy present. It has one of the longest cooldowns out of any command to compensate, but there's nothing keeping you from loading up your deck with multiple copies of it. However, it's not practical for bosses thanks to the cap on the damage you can cause per hit against them.
The Fairyland Story has the Star Tiara, which bombards the screen with stars that kill enemies instantly, and the Book of Death, which causes an earthquake that reduces enemies to dust (and points). There are lesser versions in the Moon Tiara and Scroll of Ice, which immobilize all enemies for a limited time.
Hocus Pocus has enemies which kill all enemies on screen if you shoot them.
Sine Mora has Koss' subweapon, Punk Spirit - this creates a fairly large explosion that covers around a third to half of the screen, destroying projectiles and enemies alike. Most other subweapons destroy enemy projectiles as well as harming enemies, and all of them reset your Score Multiplier when used.
In Atlantis No Nazo, the "S" powerup makes all your bombs damage every enemy on screen.
In Psycho Fox, the Straw Effigy destroys all enemies on screen when activated.
Gate of Thunder has the Energy Blast, which sweeps across the entire area of the screen to destroy all enemies. It can only be used when one of your power-ups is maxed out.
A large number of Shoot Em Ups by Shinobu Yagawa are well-known for mechanics that encourage the player to abuse the hell out of their Smart Bombs, especially if playing for score. Additionally, in many Yagawa games, the player collects bomb fragments to increase their bomb stock, and if the player doesn't have a whole bomb to use, they can use their remaining fragments to fire a weaker bomb. Some specific examples of Yagawa bomb mechanics:
Summer Carnival '92 Recca has the charge-up bomb, which, on top of damaging all enemies within its blast radius, also nullifies bullets.
Battle Garegga and Armed Police Batrider have parts of scenery that can be blown up only by bombing them. This is often rewarded with powerups or large quantities of point medals.
In Battle Bakraid, you get a point multiplier that increases as you destroy large enemies in succession, and resets if you go too long without destroying a large enemy. Firing a bomb freezes the combo timer, allowing you to buy yourself some time.
The Power Bomb in Metroid Prime Pinball works in this manner, though only for whichever screen Samus is currently on.
The Jurassic Parkpinball machine has the Smart Missile, activated by a button on the gun-shaped plunger. It collects any currently lit modes, making getting to T-Rex Triball rather easy.
The sequel, The Lost World: Jurassic Park, nerfs it in several ways - you have to collect it first from the Egg Scoop (though this is hardly a challenge, as it's usually the first thing said scoop awards), and it only works on Multiball-related criteria.