Mugen Story Mode is a tool created by kamiloxnumetal that aims to add an additional “Story mode” to M.U.G.E.N’s variety of game modes. Using the different programs provided, users can create their very own story mode with different sagas, stories and chapters. It also allows for characters to be locked/unlocked.
Story mode differs from Arcade mode in that rather than choosing a character from the player’s roster and fighting randomly-selected opponents on a “ladder”, a pre-set character is chosen (and can change through the course of the story) and a series of events are unfolded through “chapters”, in a similar way to Mortal Kombat 9 and Super Smash Bros. Brawl.
Quote from: Mugen_Story_Mode