When Killer Instinct is released with the Xbox One, it will be free-to-play, but only with one character available.
Jago will be the only character available to play when the game is released, while you will be charged to use other members of the roster. No prices have been confirmed yet for any of the characters, however one of the developers of Double Helix Games confirmed with Polygon that there would be an option similar to a season-pass where you could get the full roster, rather than paying for them individually.
Although announced as a free-to-play game, this feels like nothing more than a demo to me, especially when you bear in mind how many characters there are bound to be in the line-up. Having said that though, Jago was always my go to character back when I owned the original, so it’s not such a bad thing for me. Killer Instinct is due to be released as download-only alongside the Xbox One upon its launch.