In 2010 there was a few months of hazing between then Street Fighter producer Yoshinori Ono and Tekken producer Katsuhiro Harada. This staged rivalry, which included Harada becoming villainous at Capcom's request, resulted in two crossover fighting games being announced: Street Fighter X Tekken, and Tekken X Street Fighter, with one developed by Capcom and the other by Bandai Namco. The titles were ambitious from the start, but while Street Fighter X Tekken was released, the other half of the collaboration was nowhere to be seen. Harada recently confirmed Bandai Namco's half of the crossover is officially cancelled.
This crossover ignited a fire for fighting game fans, as the idea of the two franchises colliding in two entries was exciting. Both casts of these franchises becoming playable in each other's game engine and style seemed like a dream come true for many. Once Street Fighter X Tekken released, however, things started falling apart. There was a litany of issues with the game, such as the imbalanced Gem System and the controversy surrounding Capcom's on-disc DLC practices. The mixed reception of this crossover was the first step toward the project's eventual cancellation.
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With so many problems that surrounded Capcom's game, Bandai Namco's Tekken X Street Fighter was put on the shelf. While Harada said he wanted to come back to the project, he decided against it in favor of continuing his role on Tekken 7. When he and Tekken 7 director Kouhei Ikeda were asked about the crossover on an episode of Harada's radio show, he confirmed Tekken X Street Fighter had stopped development after 30 percent of the game was completed. They said models and animations were completed before the project had officially been canned.
The two lamented the potential of the project and its cancellation, noting they had put extra care and attention into the roster. According to Harada and Ikeda, female characters especially got attention, including Street Fighter's Chun-Li. They said they to show off the models created, but since Street Fighter is Capcom's intellectual property they wouldn't be allowed. However, one element that did survive this crossover was the implementation of Street Fighter's Akuma. By repurposing their model and animation work from Tekken X Street Fighter, they were able to include Akuma in Tekken 7 as a guest fighter.
While the crossover project has been cancelled, not all hope is lost for those who enjoyed the concept of Tekken X Street Fighter. While the franchise has had its own set of guest fighters, Tekken's own Kazuya Mishima will be playable in Smash Ultimate as a DLC fighter. With Street Fighter's Ken and Ryu being already a part of the Ultimate base game, Kazuya's addition could scratch the itch of this lost opportunity.
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Source: YouTube