“Killer Instinct” for Xbox One will be free to download with one free playable character available. Additional characters will be available for purchase starting at $4.99 / £3.99 / €4.99 each. 

Players can also purchase special discounted character packages:

Combo Breaker Pack –– Save 50 percent instantly by purchasing the Combo Breaker pack, which includes the first 8 characters (6 at launch, plus 2 characters before their official post-launch release) for $19.99 / £16.99 / €19.99.

Ultra Edition – The Ultra Edition delivers the best value for “Killer Instinct” fans. Available for $39.99 / £34.99 / €39.99, the Ultra Edition includes:

The first 8 characters (6 at launch, plus 2 characters before their official post-launch release)

Character accessory packs

Character costumes

The original “Killer Instinct” arcade game

http://news.xbox.com/2013/08/gamescom-ki

Update

EVERYONE needs to watch this interview with Ken Lobb. 

http://www.youtube.com/watch?v=TtA8zX2WCYU

In it, he confirms:

1) It is a platform. New seasons/characters/levels/etc will be added to the existing platform (game). You will not be buying Killer Instinct 2, 3, 4, etc. and everything being separate.

2) If you purchase 1 or 2 individual characters, purchasing the full game will not be $20, it will be discounted due to the money you already invested in the game.

3) There will be some type of story mode, the idea right now is shadow jago will be the final boss. He was unhappy with KI1 and KI2's bosses

4) They are working on adding online to the port of Killer Instinct.

5) Season/Round 2 should launch by holiday 2014 but very well may be sooner if they keep up their current pace.

I hope sony doesnt do this for any of the games im interested in or else id be mad. Complete garbage in my opinion

Are all the stages free then? Nice

Smart marketing.

I can see a lot of people picking up the Ultra Edition for the original game alone, the new game would just be gravy.

"The original “Killer Instinct” arcade game"

Very nice!

Seems like there is a pricing strategy for everyone. $40 for the full game is less then expected. Bravo MS

Who would have thought you find an xbox One game garbage ö

Please explain. If you want a couple characters, you spend about $10. You want all characters, you spend $20. You want everything, plus the origional arcade game, you spend $40. 

All bases are covered. The ignorant F2P jokes about this game should die accordingly. These are very varied and fair prices.

Why?  The said the game would be F2P from day one and would be included with every Xbox One.

So, you get to play the entire game with one character.  If you want, you can purchase other characters to play or buy for $20 all of the characters.  And if you're a fan of the game, for the paltry sum of $40 you get two complete games.  Killer Instinct for Xbox One and the original Killer Instinct.  Plus you get all 8 characters, as well as all the custom skins.

I don't know why this is a bad thing.

Garbage, garbage and garbage

User was banned for this post - Kantor

That's actually a very cool pricing model. I think more games should adapt this approach. Let us have the option to buy a full game, for example, say Call of Duty for the full price. But also give us the option to buy just the Multiplayer section of the game for half price so that we don't have to buy a mode which we don't want to play.