Killer Instinct 3

The gameplay in Killer Instinct retains its traditional combo-based mechanics. The basic elements of combos are Openers, special attacks that start combos; Auto-Doubles, button presses following special attacks that create automatic hit sequences; Linkers, required to join several auto-doubles together; Enders, a sequence which finalizes the combo with increased damage; and Manuals, attacks chains entered outside of the traditional combo structure. Like in previous titles, players can finish their opponent using an Ultra Combo, an automatic sequence of attacks that can only be used to end a match. Season Two later added Stage Ultras, environmental finishing moves that can be triggered on specific stages.

The game also features the return of Combo Breakers, attacks that can interrupt an opponent's combo when executed properly, as well as the new addition of Counter Breakers, which can cancel out an opponent's Combo Breaker while leaving the character vulnerable if improperly performed. Players who fail their Combo Breaker attempt or are attacked with a Counter Breaker enter a Lockout state, preventing another breaker from being attempted for three or four seconds respectively or until the combo ends. The Season Two update added the ability to use Combo Breakers and Counter Breakers even while airborne, as well as an "Aerial Recapture" option that allows certain characters to attack opponents in the air and pull them down to the ground to continue their combos. A two-segmented meter enables the use of "Shadow" moves that have upgraded hit properties and can cause more damage and combo hits, though certain characters' meters function differently.

The game is a reboot of the series' fiction, though several elements of the prior games' plots, such as a previous Killer Instinct tournament and Jago and Orchid's knowledge that they are siblings, have been retained. Arcade Mode in Season One features story-based campaigns for each character, culminating in a final battle with Fulgore. Fulfilling certain conditions allows players to access a secret battle against Shadow Jago in its place. Season Two added "Rivals" Story Mode, an expanded campaign that continues after the events of Season One, with more story content and unique sequences of opponents for each character. Like Killer Instinct 2, the game features multiple endings in Season One based on the player's actions, with multiple cinematic sequences in both story modes.

The game features 29 playable characters, including every playable character from the previous Killer Instinct titles, along with several new characters and a small number of guest characters from other franchises. Characters were released gradually over the course of several "seasons" of content, and were originally available for individual purchase or as part of season bundles. For the first two seasons, each character was given an accompanying stage, while only four stages were added in Season Three. Characters listed in bold are new to the series.

For many years after Killer Instinct 2's 1996 release, rumors of a possible follow-up circulated. In 1997 Electronic Gaming Monthly reported that Rare were deep into development on a Killer Instinct 3 which would likely be released in 1998. Years after Microsoft's acquisition of Rare, several individuals from Rare expressed interest to revive Killer Instinct franchise, such as Ken Lobb, Microsoft Studios creative director and co-designer of the original Killer Instinct games; Rare studio manager Mark Betteridge, who wished to bring Killer Instinct to the Xbox Live Arcade; and Rare veteran Donnchadh Murphy.

Microsoft applied for renewal of the Killer Instinct trademark in September 2012. Rare veteran Lee Musgrave, who was the former head of art at Rare, spoke on the issues of making Killer Instinct for XBLA: "We came close to firing off a conversion of Killer Instinct a few times, but there were licensing obstacles to that, and it never really had enough perceived interest to push it forward". Three months after applying KI trademark, Microsoft's renewal for the Killer Instinct trademark was rejected by the United States Patent and Trademark Office due to the possibility of the game being confused with the unrelated TV series of the same name that lasted for one season in 2005. Microsoft had six months to respond to the ruling. The trademark dispute was settled when Microsoft and Fox reached an agreement in April the next year.

Season One received a mixed reception at launch, scoring a 73/100 approval rating from aggregate review site Metacritic. Lucas Sullivan of GamesRadar called the gameplay "accessible enough for a newcomer while still providing the depth that the hardcore scene craves", while Vince Ingenito for IGN enjoyed it more than the original titles, calling it "fluid, deep, and well informed by the mistakes of its predecessors". Jeff Gerstmann of Giant Bomb stated that the game is "still ridiculous, the announcer still screams his head off, and the combos are wild... but actually executing KI's combos is a good time, too, making this download-only fighting game an exciting turnaround for the series".

Chris Carter for Destructoid did not take issue with the game's new pricing model, calling it "a far cry from an abusive free-to-play scheme" yet still criticized the initial content at launch as "bare-bones". Anthony Severino, reviewing for GameRevolution concluded that "if only there were more of it across more characters that had a story, Killer Instinct would be gold".