There was a time when Street Fighter 3 was the most anticipated, most talked about game on the planet. Unfortunately for Capcom, that time was about four years before Street Fighter 3 was actually released. Capcom spent those years diluting gamer interest in the series with endless minor variations on Street Fighter 2, so that by the time they finally got around to crafting Street Fighter 3, most of mainstream gaming greeted the idea with a yawn and a hearty "ho hum".
I think Capcom realized that they had basically strip-mined the Street Fighter franchise to nearly nothing at that point, so in order to regenerate anywhere near the insane enthusiasm for the previous game, they'd have to take some risks and do things that were different and unexpected. This results in Street Fighter 3 being the odd duck of the series, but also made it the most innovative and interesting.
Capcom's primary goal with this one was to compete with the fluidity and gameplay depth of rival series King of Fighters (which was the other main reason they were rapidly losing their fighting game market). This they did and did well. The game looks and feels like something in between the later Street Fighter 2 games and Street Fighter Zero/Alpha, but stopping well short of the hyperactivity and spam-focus of the latter series. The pace is a bit faster than that of Super Street Fighter 2 yet much more fluid and with a much greater array of options to cater to different fighting styles. The game feels familiar, but more free and with many more possibilities.
Primary additions to the fighting action are the ability to execute a short dash or retreat by double-tapping the stick, high jumps, short leaps, and three selectable super moves for each character which are controlled by a bar that fills as you execute moves. Two unique gameplay features introduced here (and not seen in other series of the time) are the "parry" system, which allows you to counter and briefly stun a foe if you tap in the direction of their attack just before it hits you, and a quick-rise if you tap down at the precise moment you hit the ground.
3rd Strike is the third iteration of Street Fighter 3, and adds a couple of additional minor tweaks to the gameplay. Part of the "Super Art" gauge can now be spent in the use of weaker EX Specials, which power up the normal special moves a bit when you press two attack buttons simultaneously while executing them. It also introduces the "Guard Parry" or "Red Parry", allowing you a chance to parry while stunned if you have crackerjack timing.
The one field in which Capcom seemed to be content to not challenge SNK is in the character design. Sheerly in terms of gameplay, Street Fighter 3 has remarkably good balance, and the characters have a diverse range of fighting styles with acceptably few serious mismatches. The actual aesthetic design choices, however, are kind of bizarre - the theme here seems to be "Circus Freaks and Mutants." A new character named Axel has been promoted to Main Character duties, with Ryu and Ken returning but serving basically just as familiar templates to help ease Street Fighter 2 vets into the new gameplay style. No other characters from the previous games make a playable appearance, save Akuma and Chun-Li thrown in as bonuses exclusively for 3rd Strike. Axel is sort of a cross between a pro wrestler, Axl Rose and Rambo, and never really "stuck" as a main character for the series, leading later advertising focus by Capcom to switch back to Ryu and Ken (I wasn't even aware Axel was supposed to be the main character until I saw the original promo posters.) The plot is some vague silliness that involves the Illuminati digging up ancient artifacts or something, and M. Bison and his memorable cadre are gone as the main villains, replaced by somewhat muscly guys in diapers with their skin painted odd colors. The rest of the roster is a pretty bizarre mix of characters, from a masked mummy/robot to a Kenyan woman with freakishly long legs (and who looks more like a little Japanese girl from an anime dipped into some bad instant skin tanner.)
Even if they are strange and not usually all that appealing or memorable, they are certainly animated very well. The high point of the game's art is the high framecount in the character animations. It varies by character - Elena looks creepily real, while the Shotos don't look tremendously better than their Zero/Alpha incarnations - but on the whole is quite impressive. The backgrounds seem to have been sacrificed a bit to compensate, though, being pretty but largely still paintings with a sort of watercolor tone. They look nice, but don't expect the elaborate animations seen in Alpha 3.
The final point at which Capcom took a risk is the music - the game is emceed by what appears to be a Japanese guy earnestly trying to emulate an African-American, and while this is about as corny as you probably imagine it to be, it also becomes oddly endearing (except for the actual Street Fighter rap that accompanies the demo mode.) In-game music is mostly a jazz fusion style with some dance/ambient techno thrown in; a bit reminiscent of the direction Capcom would later go in for the various V.S. games, but I found the music here to be of better quality, with more of a "hard" sound than the light pop that dominates the later games (and, mercifully, no vocal tracks.)
The game is really tailored to human-versus-human play, and this is where it excels. Single player mode is OK, and unlike most SNK fighters the computer is restrained enough that you can usually get through at least a few matches on one credit, and get decent practice in without having to drop twenty bucks in the machine in one session. You also only face ten of the twenty fighters, and get a choice from two at random for each match, so if there's one particular fighter who drives you up a wall you can skip around them. It does get tiresome quickly, however, and soon serves no purpose other than as practice for "real" matches against other people.
I think the (unfortunate) lesson that Capcom took from the whole Street Fighter 3 experience is that taking the artisan approach of carefully crafting a beautiful and rewarding game, and taking risks and innovating, may get you critical praise and a dedicated hardcore fanbase over time, but will not make you nearly the money that pumping out rehashes as fast as possible during a franchise's window of popularity will. They went on to apply this approach with an absolute vengeance to Mega Man, and to a lesser extent with some of their other series. Sad that SF3 didn't get the respect it really deserved at the time, and sad that Capcom decided to go the hardcore profiteer route, but there's nothing stopping us from revisiting Street Fighter 3 any time we care to.
* Gameplay Video