Virtua Fighter 3

This iteration is the first in the series to have undulation in the stages, such as a staircase in the Great Wall stage, a stage set on top of a sloping roof and a raft constructed of individually moving elements on a bobbing water surface.

A fourth button, the Dodge, was added (the series had previously used only three - Kick, Punch and Guard). Pressing the button with the joystick in neutral or held up makes the character move into the screen (i.e. away from the viewer), while pressing the button with the joystick held down makes the character move out of the screen (i.e. towards the viewer). This 'evasion' technique enables players to dodge incoming attacks, creating opportunities to counter-attack almost immediately.

Judgement 6, an organization seeking global domination, are hosting a third fighting tournament. The fighters all enter to achieve their personal goals. Some wish to challenge Judgement 6 and uncover the group's secrets. Kage-Maru wins the tournament.

Virtua Fighter 3 was the launch title for the arcade board Model 3 from Sega. Developed by Yu Suzuki's Sega AM2, it was a revolutionary game from a technical standpoint, with its detailed graphics earning widespread praise. Characters' eyes appeared to track the opponent's position, their muscles could flex and relax, and the fighting arenas featured stairs and slopes. The game also introduced the ability to move in three dimensions to the series with the dodge move, a feature that was apparently added fairly late in development, as Suzuki said in an interview held during the third quarter of 1995: "The fact that the game is 2D from the player's perspective probably won't change in VF3.

If the viewpoint changes rapidly during gameplay, the player can't concentrate on the game, and it's difficult to keep up with the situation your character is in, as in [Battle Arena Toshinden]." In addition, he stated later in the same interview that he intended to keep Virtua Fighter 3 a three-button game like its predecessors.

In Japan, Game Machine listed Virtua Fighter 3 on their October 15, 1996 issue as being the most-successful dedicated arcade game of the month. It went on to become Japan's fourth highest-grossing arcade game of 1996, and then Japan's overall highest-grossing arcade game of 1997. Game Machine also listed Virtua Fighter 3tb on their November 15, 1997 issue as being the fifth most-successful dedicated arcade game of the month. In North America, Virtua Fighter 3 had a successful launch in September 1996, drawing large crowds at the Amusement & Music Operators Association (AMOA) show, where it was the most anticipated game.

Worldwide, the game sold 30,000 arcade cabinets by 1997, including 18,000 in Japan and 12,000 overseas. It was more successful than Namco's rival Tekken 3 (1997) in Japan, although Tekken 3 was more successful worldwide.