The engine uses 4 directional keys along with 7 buttons for gameplay (X, Y, Z, A, B, C and Start), in order to accommodate six-button fighters which use three punches, three kicks and a start button. However, characters do not necessarily use all seven buttons, nor need to follow a traditional six- or four-button format.
At most, two human players can control characters, with others being controlled by the engine's AI (including Watch Mode, a demo mode where the computer controls all characters). In addition, several gameplay modes are available via the main menu.
The main mode of play is Arcade mode, where a character fights random characters as in other fighter games or use a coding to decide order. There are also three different kinds of Team modes: Single, Simul, and Turns. A fourth mode, Tag, is listed in the EXE along with two related script controllers, but was never used. In Team mode, either side can use any of the team modes. Single is identical to not having a team, Simul gives that side a computer-controlled partner who fights simultaneously, and Turns uses a different character for each round of play, varying from a set number usually from 2 to 4 different characters in a row. If set, the characters' starting life will be adjusted according to the number of players on each side. If one side has two characters and the other has only one in one of the Team modes, the side with two characters will each have half their respective normal maximum life values. Pre-WinM.U.G.E.N versions of the engine could have this feature adjusted or disabled via the options screen or the config file, but due to the nature of the hack, the option has not yet been reactivated. Team Co-op is similar to Simul, except both human players fight on the same side at the same time.
In Survival mode, there is an endless stream of opponents, fighting them either one by one or two in a Simul match. The objective is to beat as many opponents as possible, with the game ending when the player's character or team is defeated. The player can choose to play alone or in Simul or Turns mode, though Single Player mode gives the highest life and life recovered at the end of each round won. Survival mode was the last addition done to the engine. As such, it is not present in any of the DOS versions of M.U.G.E.N.
Elecbyte released the customizable fighting game M.U.G.E.N in 1999. The engine was originally released on July 17, 1999. Beta versions of it were made to work on MS-DOS and Linux platforms (Windows platform was never officially released until the release of 1.0 RC1 version, previous Windows unfinished versions were "leaked" since 2003), distributed through their website. The engine allows users to insert created characters, background stages, and other game objects through interpreted text files, graphics, and sound compilations to create a functioning fighting game similar to commercial games. While the engine is set up primarily for fighting game development, several other Book types have been developed using it, including shooter and platform style games. Officially, Elecbyte claims to have forgotten what the acronym M.U.G.E.N stood for, but the readme documentation states that its meaning referred to the days when the engine was meant to emulate shooting games as opposed to fighting games. The meaning of "mugen" in Japanese, "unlimited", may have influenced the naming. M.U.G.E.N later expanded into a wide variety of teams and communities such as Mugen Fighters Guild, Mugen Infantry and Mugen Free For All.
First released on July 17, 1999, M.U.G.E.N was initially created for MS-DOS. Development of the DOS version ceased when Elecbyte switched to the Linux platform in November 2001. For a time, Elecbyte had posted a request for donations on their site to legally obtain a Windows compiler to make a Windows version of M.U.G.E.N. However, the development group discontinued the project in 2003 and shut down their site. Later speculation pointed at leaks made public of a private Windows-based M.U.G.E.N beta that was provided to a small quantity of donators.
The private WinM.U.G.E.N beta contained a two-character roster limit, locked game modes, and nag screens. With the beta leaked and Elecbyte gone, a "no limit" hack that removed most of these limitations was made available in 2004, followed by subsequent updates to deal with bugs and other issues. This version of M.U.G.E.N is functionally the same as the last Linux release, though with subtle differences and unique issues, mostly revolving around proper music and music plugin support. Because of the changes between the DOS and Linux versions of M.U.G.E.N however, many older characters required at least the SFF files to be modified to show palettes correctly (notably on portraits) as well as some changes in how certain CNS script controllers functioned, causing some minor upset and those that could still run the DOS version in some form sticking to that, as well as DOS patches to downgrade characters to be compatible with the older version of the engine.
In May 2007, a hacked version of WinM.U.G.E.N was released by a third party that added support for high resolution stages (like those seen in Guilty Gear X) at the cost of losing support to standard resolution M.U.G.E.N stages. Later that month, another hack was done to add support for high-res select screens. In July 2007 another hack based on the last high-res hack allowed for only the select screen to be high-res and not the stages. In December 2007, a hack from an anonymous source allowed both low-res and hi-res stages to be functional in the same build, requiring only a single line of code to be added to hi-res stages. As of June 2007, an unofficial Winmugenwas also made available on a Japanese website.
In mid 2007, Elecbyte's site returned, though not without some controversy as to the legitimacy of it, as it only showed a single logo with Google ads on the side. On July 26 a FAQ was added to the site, which went on to claim that they would release a fixed version of WinM.U.G.E.N before major format changes in the next version, and noted the formatting changes would remove compatibility in regards to older works: "Do not expect old characters to work. At all". On September 19, 2009, Elecbyte made an unexpected comeback, updating their website with various features — including a forum and a downloads section, where a new build of M.U.G.E.Nis now available.
In September 2009 a full release of M.U.G.E.N (MUGEN 1.0 Release Candidate) that includes various new features — most notably (official) support for HD resolutions, victory screens and language localization — was made available through the Elecbyte website. Although this current build has various visual glitches and requires a fair amount of adjustments to the previously made content in order to be fully compatible with the new engine, Elecbyte has stated that it is their goal to have the new M.U.G.E.N fully compatible with previously designed content.
In January 18, 2011, M.U.G.E.N made a 1.0 version only for Windows, ironing out most bugs that were featured in the release candidates and is compatible with almost all, if not all, of the previously made content.
Users who develop content for the game engine are commonly referred to as authors. These authors create customized content such as characters, stages and screen packs/skins. Often authors will port popular characters from 2D fighting engines such as the Street Fighter series. Many authors will also create original content. Many websites exist to showcase and disperse the developed content and forms what is often referred to as the "Mugen Community".
Due to the customizable nature of the game engine no two versions of mugen are the same. Each person is encouraged to download their own copy of the game engine and to create or add content to match their personal preference. Groups of mugen authors will often collaborate to produce a full game using the engine. These full games are available at a variety of quality levels and are released under the general mugen license.
"Under this license, permission is granted to use the M.U.G.E.N Environment free of charge for non-commercial purposes... Elecbyte provides a M.U.G.E.N redistributable package, containing a minimal M.U.G.E.N Environment, that may be included with third party content for redistribution."
With the dual status as an development tool and as a game itself M.U.G.E.N has often been reviewed in periodicals and magazines, usually exhibiting a large variety of works from various authors. Games Radar named M.U.G.E.N as one of the "12 weirdest fighting games ever".