While I think Nintendo and Sony have a stronger library of characters, a Microsoft-fighter has TONS of potential with its roster. From Microsoft-made IP; you have a lot of characters from X-Box exclusives and original IP such as lots of Sega characters (JSRF, Panzer Dragoon, Shenmue), Bioware characters (Knights of the Old Republic 1/2, Jade Empire) and characters like Vudo Vince and....um Blinks?
I'm not really that attached to Microsoft's IP (as I can't really see how Master Chef and Marcus could be interesting fighters, as all they have is different guns, but PSAS WAS able to make Nathan Drake, Emit Graves, Redic and other gun users fun, so who knows) but I would be the most excited due to Rare characters being in this. Banjo & Kazooie, Conker, Joanna Dark, Kemio, a Viva Pinata, TONS of Killer Instinct characters, JFG characters and tons more could be in this and have their chance to shine again after being dormant for so lone

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Even then, I could see Microsoft having lots of indie developers lend their characters over for this (due to their start with XBLA) such as Super Meat Boy, Bastion, the main character from Braid, Gomez from Fez, the ship from Geometry Wars, the Castle Crashers, Aein Hommided (I'm sure that got a XBLA port at some point...) and tons more.
The biggest issue I would have is, HOW are all these characters and franchises are going to fit in this? That was one of the biggest issues with PSAS (with their being no 'general' artstyle for the characters) and even then, most of Microsofts IP's are violent characters (sure Sony has them too but they are even out with many platforming mascots and much of the PS1/PS2 characters), so having say Banjo fight Master Chief may look odd to say the least...
Either way, this would be really cool to see and would be a perfect game for the X1; make this with TONS of characters from the ENTIRE Microsoft IP history and see what works

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