The game, which was designed as a direct sequel to Street Fighter II (1991), initially discarded every previous character except for Ryu and Ken (hence the "New Generation" subtitle), introducing an all-new roster led by Alex.

Some abilities are also taken from other Capcom fighting games, such as players being able to dash or retreat like in the Darkstalkers series,[6] as well as performing super jumps and quick stands after falling from an attack like in X-Men: Children of the Atom.

As well, the player cannot perform aerial guards like in the Street Fighter Alpha series, which are replaced by parrying ("blocking" in the Japanese version).

[9] The game was first unveiled at the September 1996 Japan Amusement Machine and Marketing Association show, in the form of a few minutes of footage incorporated into Capcom's PR demo tape.

[10] In an interview shortly before this show, Capcom senior planner Shinji Mikami stated that it would be impossible to convert Street Fighter III to any of the home consoles then on the market.

Amending Mikami's earlier statement, in late 1997 Capcom said it might be possible to port Street Fighter III to the Sega Saturn if one of the console's RAM expansion cartridges were used.

General producer Noritaka Funamizu explained the controversial decision to keep the series in 2D: "We feel that 3D is not really suitable for the head-to-head fighting ... and, to be frank, Capcom doesn't really have the techniques to display high quality graphics in 3D.

This compilation also allows players to use Gill (in both games) and Shin Akuma (in 2nd Impact only), who are exclusively computer-controlled characters in the arcade version.

[23] Next Generation reviewed the arcade version of the game, rating it four stars out of five, and stated that "The great mystery is why Capcom called this SFIII instead of leaving that honor for a more powerful and revolutionary 3D title.

"[19] GamePro similarly remarked that while the graphics are outstanding and the controls are flawless, the game lacks the innovation and series evolution that players expected it to deliver.

They also said the new characters are a mix, with some of them seeming like they would be more appropriate for the Darkstalkers series, and concluded that the game "makes you look forward to the next SF installment rather than getting you excited about playing this one repeatedly".