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Poliwrathlord said:
I think that if this games existed, it would be the smallest roster of characters ever in a fighting game.

Actually they have Rare catalog.  You have perfect Dark, BattleToads, Banjo, Conkers, Viva Pinata,   which comprise a decent list.  Then they could use their own catalog since MS has a lot of IP they do not actually use.  The question is that outside of Rare catalog, Halo, Gears, Crackdown, most of their other stuff is not well known.  The key is that MS probably would pay for other characters but who knows how that would end up.  I am sure they could fill up a decent roster but excitement for that roster is something totally different.  

The real question is who would do such a game for MS.  Their current first party doesn't have the experience.  They could use the guys that do Killer Instinct or hire out 3rd party developer.

As for the question would I purchase such a game, depends if it looks like fun.  A well flesh out roster with unique abilities and fun element would definitely get my money.