With some very practical and helpful ideas from fighting games such as Skullgirls (Tournament Mode) and Injustice: Gods Among Us' navigational functionality and user friendly interface, the bar for fighting games needs to be set. Players will eventually (or at least SHOULD) have new expectations for fighting games that release in the future.
With the new PS4 and the new untitled "NextBox720", there are some brand and grand opportunities here, just waiting to be taken over. More than any other fighting game Killer Instinct has the greatest opportunity to really take advantage of and profit from.
New Console Generation, means time for change. New platform, new ideas, new games. In the previous generation, Street Fighter IV and Marvel vs Capcom 3 helped bring both old and newcomers to fighting games and stuck around to play! Rare hasn't released any KI games since KI2, and everybody is craving for KI----SOMETHING.... To generate a very loud but positive crowd response, all the development team would have to do is "ANNOUNCE" (not even release, just announce) a new KI game for the new XBOX system to release. Just as importantly, they would have to announce Killer Instinct 3 with MK special guest characters or announce Killer Instinct vs Mortal Kombat. Fan anticipation is just as important as a game's release date and whether the response is positive or negative, the important thing is to get the word out into the streets and have fans talking about it all over the world. Since we're a long ways away from KI to come out and the next generation of consoles are around the corner, it would be unrealistic to say that they would have to make KI3 / KIvsMK a launch title. Although the surprise would help establish incredible amounts of hype.
Street Fighter, almost singlehandedly revived the fighting game community (FGC). With such a strong demand for a new KI game, Killer Instinct has a similar opportunity to do the same. Killer Instinct has always been a newcomer friendly game and veterans love it just as much as well. What SFIV aimed to do was close the gap between competitive and casual gamers, and I think KI perhaps executes this idea best. KI has tons of depth, but button friendly enough that you can mash buttons casually and see the flashiest combos happen. People can only take so much Street Fighter.
Competitive and casual gamers are always the target audience when making games. This is especially true when talking about fighting games. What isn't targeted however are spectators and newcomers. Games do not produce features & functions that aid spectators who don't understand the game and newcomers that are just picking it up. Sure developers install "trial modes" and "tutorials" to help them learn the game, but these things lack a particular human touch. Brief but vocal (and sometimes visual) explanation AND encouragement. During combat (Arcade, Versus, etc), set challenge goals and achievements to help them get a "hands on" feel for the mechanics of the game. King Of Fighters XIII did this during Arcade Mode.
How this should be done?
First, developers need to keep the fast, flashy, but button friendly combos, such as with KI and KI2! Keep the mechanics, including combo breakers (but keep combo breakers in check with some other mechanic or dynamic of the game).
Secondly, develop this game with spectators in mind. Include an "Audience Mode" and perhaps "Instant Replays". Audience mode will have a narrators, commentators, and/or fonts to help explain/highlight characters, in-depth situations, strategies, and even the character themselves during the character select screen and during combat. For example, during character select, highlighting a character will provide a screen that briefly (for maybe 10 seconds) explains what the character is about and that character's strengths and weaknesses are. Instant Replays would automatically select a highlighted portion of the match, replay it in slow motion, and just briefly explain the replaying segment. These options should allowed to be turned on or off of course, in case these get annoying.
Thirdly, follow Skullgirls and Injustice as a template. Skullgirls's "Tournament Mode" is amazing. A few things such as transitioning back to controller slot select when a controller is unplugged is just so convenient. Injustice has the movelist displayed for both P1 and P2 sides when you pause it, and the entire move list display frame data when you highlight an individual move, and if it's a special move, it even describes the special attack and if the move has other functions, like charging.
Lastly, keep the character designs, sensible. Girls are also a demographic in the gaming market and getting their attention only HELPS! MAKE MORE FEMALE CHARACTERS and do NOT make TOO MANY "sexy" female characters. Two half naked female characters is enough (see Orchid). After that, the rest of the female cast should be sensibly dressed and should be treated/marketed as an individual, not a female to attract males. Let's welcome girl gamers too!
With an already established franchise with a secure fan base that deserves a sequel that is LONG overdue, KI3 / KIvsMK cannot fall short of success.