Ryu and Ken stay at a very fancy hotel in Hong Kong and meet their tour guide, Chun-Li, who is meant to show them the city. To her surprise they are travelling on a helicopter to head for the restricted area Kowloon Palace, to find some street fighters. The pilot, Tyler, denies to land in this area, but is convinced by the boys finally. Arrived in Kowloon Palace Ryu, Ken and Chun Li find the Devil's Battle Cage, where a martial arts tournament takes place. Ryu enters the ring and defeats all opponents sent by Lean, the overlaw of Kowloon Palace. Lean marks the outsiders for execution therefore and the three are on the run to leave the place.