Killer Instinct is a free download for Xbox One that comes with Jago - but you have to pay for more characters.
The surprise Xbox One launch title will be available to download for free, and with the client you'll be able to play online and local multiplayer - but only with Jago.
Torin Rettig, the producer on the game at Microsoft Studios, told Eurogamer at an event at E3 last night that the company decided to use this release strategy because when it comes to fighting games, most players only focus on a handful of characters.
"It's really impressive to have a roster of 50 characters, but how many of those characters am I really going to play?" Rettig said. "And I have to buy a $60 game in order to play those one or two characters I want to play.
"Fighting games are big and expensive and they can be complicated. It's very hard to get good at a number of characters. You generally gravitate towards one or two or three or four at the most.
"We want players to be able to experience the game that way. Just buy the characters you want or buy them all and we'll give you a discount on that."
Rettig said Microsoft hadn't decided how many characters would eventually be made available, but did confirm plans to release them over time, establishing a regular cadence to "keep people coming back and engaged".
Microsoft also wants community feedback to influence character design. A beta program will let players "get in even earlier" while the characters are in the development phase, thus allowing the developers to base them on feedback.
Rettig refused to reveal exactly how much characters will cost to buy, but did say they will be priced "competitively" suggesting they will come in at the single digit dollar mark. Microsoft will also sell costumes and customisations for those costumes. These are purely cosmetic. Will Microsoft sell arenas? "There are still some aspects of what content we're giving away, what you'll grind towards and what you'll buy that we're working out," Rettig added.
Ultimately, Microsoft wants as many people playing the new Killer Instinct as possible, hence the free-to-download business model.
Meanwhile, Rettig said Rare, original creator of Killer Instinct, is involved in the reboot, but the principal creator is Silent Hill: Homecoming studio Double Helix. Builds are sent to Rare periodically, and the UK developer offers its feedback. "At Rare there are not many people who worked on the original game who are there any more," Rettig explained, "but there are some people who worked on it. We send builds to them. We get their feedback, and we factor that in to how we approach the game."
However, Ken Lobb, the veteran Microsoft games executive who worked on the original game as well as Rare classic GoldenEye 007, is "intimately involved".
"It's unstructured," Rettig said. "We want to make sure when we're making it we're staying true to the original game and Rare is good at helping us with that. But the real standard bearer for that is Ken Lobb. He's the guy keeping that alive. He has the knowledge of all the systems."
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