Landing in Hong Kong.
Ryu and Ken stay at a very fancy hotel in Hong Kong and meet their tour guide, Chun-Li, who is hired to show them around the city. To her surprise, they are traveling via helicopter to the restricted area Kowloon Palace, in order to find some street fighters. The pilot, Tyler, loudly objects to this idea, but eventually accedes after much begging from the boys. Arriving in Kowloon Palace, Ryu, Ken, and Chun-Li find the Devil's Battle Cage, where a martial arts tournament is taking place. Ryu enters the ring and defeats all of the opponents sent by Lean, the overlord of Kowloon Palace. A humiliated Lean marks the outsiders for execution, forcing them to flee and fight their way out of Kowloon Palace.