Most impressive!
It impresses me that you manage to maintain a very solid level of visual quality in both Virtual Fighting movies. Even the little details, like player 2's super move, are spot on!
I especially like how you've encorperate more dialogue and emotion into this work. Well, to be more honest; it flatters that you liked and used my suggestion from my review of number 1 (this goes without saying that I don't know if you were already planning to use more dialogue). I especially like how you put emphasis on Player 4's emotion, once his arm gets cut off. It puts the majority of the audience focus behind him, and picks him as the strongest character of the original 4.
I really saw differences in each most of your characters. In this I am referring to Player 2, Player 4, and both Hackers. However, I find that the Red and Green characters are not around long enough to establish their own specific differences. Perhaps if you can develop a way to keep the weaker players around longer, than your audience will see how different they are from one another. For this, I suggest that you allow all your characters to showcase their skills, before someone defeats them.
Future suggestions (in a nut shell)
1. Keep weaker and less important characters around longer. So we can see their different characteristics and fighting styles in greater depth.
2. If you use alternate endings, try not to deviate too far from the original ending. If you alter your ending too much, then you might confuse your audience with which of storyline you are going to continue working on.
3. Keep up the good work. I'm really enjoying this series.