I've heard this used to describe baseball games where the pitchers aren't very good and almost every hitter gets one or two hits off of the pitcher. Usually a few of these are home runs.

I've also heard this used to describe any game where a fight breaks out and lots of people are throwing punches.
For example:
That Royals and Cubs game was a real slugfest. They combined for a total of 28 hits in the game.

The hockey game last night turned into a bench clearing slugfest when one guy ran into a goalie.