I didn't want a big crossover between SC and MK, just a guest character trade. Shang on SC, and Algol on MK. I think everyone would be fine with that. It's plausible, entirely. It just depends on whether or not Ed Boon is as stuck up as I think he is.
By the way, for all the people suggesting guest characters (Steampunk Inquisitor..) I don't think we should just randomly say "I like this character, so put it in". I think Krystal Fox, Mario, and Nathan Drake would be awesome guest characters, but to other people it's a dumb idea, and it isn't going to happen either.
Shang Tsung really wouldn't work. Why? A few reasons: He doesn't have a weapon, the game he is from is too "mature" for SC's taste (that didn't stop Kratos from being in SC, even though Shang Tsung has been in a crossover before and people got salty over the lack of gore and blood in it). Characters like Kitana, Mileena, Jade, and the two guy "overrated-as-hell" ninjas actually make more sense than he does.
4. I am completely aware that it doesn't make sense, but I like steampunks characters :D And, you must admit it, a guy coming back from the victorian era isn't really shocking: we've got swords with spirits, a flying fire-breathing lizard, a guy floating mid-ait shooting bubbles, a golem, people who don't age (and with back-breaking boobs), a vampire ghost, two people with deformed arms, a mechanical ninja,
And that isn't steampunk-inspired, I don't know what is. Must be because of the attire. That he isn't Victorian era 19th century-inspired, which steampunk is defined.
I'm not trying to knock the steampunk character idea. Just the plural form "steampunk characters" I would disagree with, and the definition of it. Seems you want the Victorian eraIn my personal opinion, I would limit to at least one (which I feel that Yoshimitsu falls under it anyways), with an attire and background relating to something more historically-influenced. I guess it's because I am a Soul Blade fan aestheically that I think like this.
But most of what you did mention all have reason to it: Soul Edge (the reason of many things magical and evil, and Soul Calibur even existing), Astral Chaos, Alchemy (but Ivy was born with Soul Edge in her blood too), and in Taki's case, Ninja abilities (even though Soul Edge gave her an upgrade).
[without even mentioning three time travellers (Heihachi, Ezio, Spawn) and galaxy travellers (am I the only one who like both Vader and Starkiller?)
I'm thinking these are non-canon. They are all there to have the guest characters be in the game. They just needed a storyline.
Guest characters are fine. All of this is the way PS better promotes the installments. It's a matter of fitting them in with the rest of the characters in gameplay. We'll know that they are all non-canon to the actual storyline anyways. Only two that are canon are Ashlotte, and Necrid, guest characters, but not crossover characters.