Pre-Mortal Kombat,had already showed off what could be done with digitized video in an arcade fighting game. Nevertheless, it didn't have nearly the impact as certain other genre games. Although that wasn't even its only specialty.
Graphics aside, the "pit" is actually a three-dimensional ring, delimited by a grey mass of spectators. So it is possible to move "into" and "out of" the screen. However, this has a clear limitation: it is not really reflected in the gameplay, as no punching or kicking in these directions is possible. So not overly useful. Actually, the extra dimension even hurts, but more about that in a moment.
Second, a number of objects are lying around in the pit. These can be picked up and used as weapons. Larger objects are sort of useful when thrown and (probably) increase the "brutality bonus" at the end of the match (totally ridiculous). Smaller weapons don't have such great use.
The reason for all this being the poor, inaccurate controls. The graphical perspective with insufficent size scaling is also to blame here, as it is often hard to make out whether you're even standing in the right place to pick something up. Same with attacks against the opponent: if you manage to trigger the right controls to launch a strike, it may very well miss as you may be inadvertently standing in the wrong place.
Coming back to the graphics, it's clear that the hardware of the day wasn't ready for such a thing yet. As already mentioned, the sprites don't scale to perspective. Everything apart from the fighter sprites looks quite amateurish. The animations are quite jerky and this makes it hard to really make out what is going on at times.
The only redeeming factor is really the game mode with three fighters at the same time. This is a good idea which could be much more fun even than the regular duels between two human players. Could be in a better game, at least.