NetherRealm has detailed King of the Hill mode in Mortal Kombat and in apparently, it is a party mode that replicates the feel of being in an arcade.
Using Avatar, folks can cheer or jeer players as they battle it out on a "big screen" in a room resembling a theater. Think of it as a warped MST3K style of commentary as you watch the brawls.
The video below explains it rather well.
Mortal Kombat is out on PS3 and 360 next week.