According to Daniel Fornace from Microsoft Studios, the upcoming Killer Instinct for Xbox One won’t receive the Arcade Mode until all of the Season One characters arrive to the game, that means until the first eight characters of the game gets released.
“Our Arcade mode is going to come out when we’ve done the eight characters. So once the last character comes out then we’ll have Arcade.”
So the game will arrive with the game modes: Survival and Dojo.
“Survival is like our endless mode. The way it works is you pick a difficulty and you go in, and you’re basically playing a long chain, and after each match you regenerate health, but as you go on you generate less and less, and even if you do beginner difficulty, as you get to the higher numbers the CPU does start getting tougher, so you’ll still hit a limit.”
“You set your difficulty to where you’re at – so if you set it to Champion it’ll start hard and get even worse.”
“The Dojo is our big tutorial mode. We’re teaching you about Killer Instinct, but we’re also trying to teach you about fighting games in general, and their terminology, because often you’ll hear people talk about fighting games, and you know they just don’t know what they’re talking about.”
Official Source: http://www.vg247.com/2013/11/09/killer-instincts-arcade-mode-wont-release-until-conclusion-of-season-one-on-xbox-one/