Y'know what, screw it. Let's go for something a bit unorthodox.
Character Name: Dwayne "The Rock" Johnson
Character... origin?: CES 2001 Event but then also WWE
This final fighter is in a particularly interesting state.
Xbox Legends ClimaX would have been released in the 20th year of the Xbox brand, and I think choosing a character to truly celebrate that would be an interesting choice - one that works well for historical importance, modern relevance, and as a "literally WHAT" pick that I think would get people talking, all while having an interesting history of their own in the video game space both directly and indirectly.
I'd imagine he's also in a good spot when it comes to a moveset. While a lot of his cultural exposure nowadays comes from his various action films (and you could totally take a Johnny Cage approach of dialing the showbiz element up to eleven), his history in the WWE would also lend to a pretty neat moveset based on wrestling and the like. Taking a slightly dialed-up, silly approach - like giving his CES 2001 outfit a huge WWE belt over the jacket and just having him fight in that - would probably help him keep up with some of the more eclectic picks in the roster.
So... yeah. While I wouldn't say The Rock's in the same state as characters like Spider-Man when it comes to being "unmistakably associated with video games" as a whole, his connection to the Xbox brand
specifically perhaps lends some creedence to his inclusion. (And that's not even getting into WWE's history in the video game space as a whole.)
...I totally understand if you wouldn't want a real celebrity in the roster, though - I've got a few issues with the concept too. At the very least; this could be a fun thought exercise.