Celerity
Lab Monster
Running tournaments for any game on XB1 will bring its fair share of problems, this is only the tip of the iceberg. There are other problems which could be discussed for dayshow do they run current games? You have copies of the game and all the DLC. Same deal. (If the developers are nice, they might even provide free codes for tournies to use to get full access to promote the game)
To be competitive, you need to at least have some understanding of other characters, and thus, owning all of the characters is a definite advantage. I'm going to assume that the price point to own the full original cast will be much more than buying a regular game, otherwise the F2P idea doesn't make much sense. Maybe I'm wrong and the price will be about the same. It certainly won't be less.
Before anyone mentions LoL, remember you can unlock characters for free in that game, and the top players play often enough to do exactly that. If KI3 has a similar system, I guess that's not too bad, but I don't think it'll happen since it would be a very poor business decision to let your most dedicated players play for free in such a niche market.
TLDR: Casual players will be happy, competitive players and completionists should be very sad.