The King of Fighters '96

The King of Fighters is an annual tournament uniting fighters from across the world, starting in 1994. Those deemed worthy of entry into the King of Fighters receive a letter of invitation from an anonymous sponsor of the tournament. Fighters are divided into teams of three and battle other teams in order to advance to the finals.

In The King of Fighters '94 and The King of Fighters '95, the sponsor of the King of Fighters tournament turned out to be Rugal Bernstein, a notorious criminal and fighter who held the tournament in order to satisfy his thirst for competition. He was consequently defeated at the end of the first two tournaments by the team from Japan, consisting of the story's main protagonists, Kyo Kusanagi, Benimaru Nikaido, and Goro Daimon.

In 1996, the King of Fighters tournament was announced again, though the letters of invitation sent out to fighters were no longer sent by Rugal. The letters also announced many changes, the first of which being a massive overhaul of the tournament's approach. During the time that had passed between the tournaments in 1995 and 1996, and the King of Fighters tournament's fame had grown immensely, to the point that it turned into a major international event, which had not happened before. Huge corporations transformed the King of Fighters tournament into something widely televised, commercialized, and celebrated, drawing in many crowds.

The Japan Team reached the finals of the tournament again, where the sponsor turned out to be a woman named Chizuru Kagura. Her intent was to make contact with Kyo Kusanagi, as well as his rival and enemy, Iori Yagami. After fighting Kyo and losing to him, Chizuru revealed to him that a larger power was afoot, known as the Orochi, and that he would soon have to battle against it.

New characters introduced in this episode include Kasumi Todoh, who became a member of the Ladies' team and acts as a rival to the Art of Fighting Team; Leona Heidern, who joins the Ikari Team in place of her mentor, Heidern, to investigate Geese Howard; Mature and Vice, two of Rugal's assistants who join Iori Yagami and aid him; and the Boss Team, composed of Geese Howard, Wolfgang Krauser, and Geese's right-hand-man, Mr. Big.

This is the first game to achieve KOF's distinct look; its graphics and sound more closely resemble the newer King of Fighters games than they do those of KOF '95.