The answer is quite simple, the game has great graphics and a terrific sound track. The only problem was the complete amateur coding this games has. That, and the fact that it was released on the 3DO (a machine that would soon die).
There was a protype-arcade version, but it was never released.
Having any of those things changed (A.K.A more time for coding or having the arcade version released), this game would probably have had a sequel. And this game would probably been a serious threat to Mortal Kombat.
But lack of interest from the producers made this impossible.