In order to activate the powered up Spirit Bomb you must first pick Goku in regular form from the character select menu. Once the battle has started charge Goku's energy up to 100%.Once you have done that transform to Kaio Ken. Then when you are ready, fly above the character you are fighting and then activate the Spirit Bomb. You will launch a more powerful Spirit Bomb but note:(there are no changes in the look it is just more powerful than normal).