First of all this might be something that appeals mostly to Urban Rival fans, altough Urban Rivals still remain TOO simple minded, so naruto arena might be a bit more "complicated" but still simple.
You get to choose 3 characters from a decent pool of starting characters and battle yourself through the arena to unlock more characters.
The characters start with 100 HP at the begining of each battle.
For each character still alive, you get 1 random chakra point / round. There are 4 types of chakra and each skill of any character needs a specific chakra requirement to be able to use. Characters have 3 skills and a 4th skill which lets them be invulnerable for 1 round to dodge some damage.
Some skills show as requirement black colored chakra which is actualy any chakra points you have sitting around and want to use.
Game is completly free, you can donate but i have no idea if that actually unlocks characters without you having to fight for them.
I had an account 1 year ago and played the game a bit every day and managed to unlock all character available back then except 3 and also got #1 since i found the most broken combos easy. XD
Then i ditched the game and now i started with a new account and am doing still great. Don't worry they seem to have balanced a lot the game so there are hardly any imbalance issues and yes i still win a lot.
There's also http://www.soul-arena.com
for the bleach fans which is totally imbalanced and has yet to be fixed. The characters you unlock later on are much much stronger than the starting ones for sure.