In The King of Fighters '96 (1996), several moves from Kyo Kusanagi were changed in order to adapt him to the new game system. However, the original moveset was still popular among gamers and as such, an alternative version of Kyo was added to both The King of Fighters '97 (1997) and this game.
Since this game rebooted storyline from Chizuru Kagura resetting the events of the last four KOF tournaments (in which the Mortal Kombat 2011 reboot would go a similar plot direction), the SNK staff decided to return Rugal Bernstein as the final boss, noting that "he's the only character who truly represents the ultimate KOF boss." Additionally, some of his special moves were redesigned, which the staff found to have made him the strongest version of Rugal as well as one of their favorites.