M.U.G.E.N. is a 2D fighting game engine produced by Elecbyte Games. Almost every aspect of the engine is programmable or customizable, from the graphics used for the health bar to the game's combo system.
The engine works by reading information about the various characters created by the user. M.U.G.E.N. itself does not provide a development environment, though Elecbyte offers a functional suite of development tools that allow you to generate the proprietary SFF, SND, etc. files from your own source graphics and sounds.
More information on M.U.G.E.N., including technical documentation and tutorials, is available at http://mugen.elecbyte.com.