As in the original Street Fighter, each of the playable character has special techniques that are performed by inputting specific commands and combinations with the joystick and buttons. The play controls consist of an eight directional lever and three attack buttons: punch, kick and throw. The gameplay follows the typical formula of most fighting games: the player competes against his opponent in best two-out-of-three matches. Now, Jeff's adopted sons, Terry Bogard and Andy Bogard, along with their friend Joe Higashi, enter the tournament to get their revenge on Geese. Ten years prior to the events of the game, Geese murdered a rival martial artist named Jeff Bogard who was on his trail. The plot of Fatal Fury centers around a martial arts tournament known as the ' King of Fighters' tournament, held in the fictional American city of South Town and sponsored by local crime boss Geese Howard. While Street Fighter II placed more emphasis on combos, Fatal Fury placed more emphasis on the timing of special moves as well as storytelling.

Fatal Fury, which Nishiyama envisioned as a spiritual successor to Street Fighter, was developed around the same time as Street Fighter II (1991). The game was designed by Takashi Nishiyama, the creator of the original Street Fighter (1987). 4.2 CPU-Controlled Characters (Available Only In Versus Mode, SNES & Genesis ).

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