These fighters are gray-scale clones of the characters that appear in the game, they are encountered during the story mode when a playable character reaches their respected stage, or when two players pick the same character in multiplayer mode. Upon reaching their home stage, Robotnik will appear in a UFO-like vehicle and zap the player(s) with a green ray, causing a gray-scale clone to fall out of the first player's character like a ghost, both characters will then be surprised by the other and begin to fight. These clones use the same exact move-set as the player and are completely alike to the character they originate from, the only difference being the black and white color.
Strangely, in the original Sonic the Fighters, when Eggman clones an Eggman Robot, Metal Sonic, or himself, the clone is in full color. This can make the battle very confusing.