Another KOF tournament is being held and this time, it's hosted by the NESTS cartel, the group of antagonists behind the events of the previous two games.

Heidern also makes his KOF return, taking Whip's place in the Ikari Warriors Team, while Kim Kaphwan's young student May Lee takes over Jhun Hoon's place in the Korea Justice Team, the latter being unable to compete due to an injury.

Following the bankruptcy of SNK (the old company), development was handled by BrezzaSoft and South Korea game maker Eolith (who was also a financial sponsor along with Mega Enterprise, which had a business partnership with the game at the same time), while sales were handled by Sun Amusement[1] and Playmore.

[2] In 2001, SNK went bankrupt but Eolith contracted a license agreement in the same year to keep with the production of the series KOF.

Eolith took interest into developing The King of Fighters due to the franchise's popularity in Korea and wanted to please the fans of the series worldwide.

Fearing disappointment from returning fans, Eolith decided to maintain most of the common parts from The King of Fighters while adding new elements to it.

[3] Despite the episode being created by Eolith, the Mexican company Evoga had a major influence in the game due to the franchise's popularity within Latin America.

This pushed the development team to design a setting with Mexican undertones and also to add an entire character, Ángel, a NESTS agent from Mexico.

While working on it, the team played The King of Fighters '98 alongside the developers to see if they could include a character within the game.

SNK faced struggles with making Zero as they wanted to create a boss that surpassed Krizalid from The King of Fighters '99.

[7] The final boss, Igniz, was conceptualized as a sexually appealing character in order to generate a contrast with other members from the cast.

[12] GameSpot gave the NeoGeo port of the game an 8.7 out of 10, praising the balance with the cast and the Striker system but criticized the high difficulty of the boss Igniz.