At the beginning of the movie, X is seen skydiving out of an airship as Sigma, Zero, and Chill Penguin battle a giant Mechaniloid below. X fires a charged shot through it, but it is still standing. After a struggle, Sigma arrives with his saber and defeats the Mechaniloid.
Later, it is shown that the Mechaniloid was being controlled from within the city (close by the Maverick Hunter Base, as Zero commented). When X and Zero go to investigate, they find that everyone inside has been killed. When X and Zero give their report to Sigma, Zero takes note that whoever killed all of the Reploids inside was extremely skilled in combat. Sigma looks at the two, and walks away saying nothing, leaving X and Zero confused.
Another Mechaniloid attacks the city, and as X and Zero leave Hunter Base to investigate, they receive a call telling them to head back, as Vile, their captive, had escaped. When they arrive, they find that the scene is reminiscent of the situation from the night before, and also note that it definitely couldn't have been Vile as the methods used were far beyond even Vile's capabilities. Zero notes that whoever did this had incredible analytical and combat skills, and immediately grows suspicious of who it was.
X and Zero later arrive at a missile base outside the city, as Hunter Base had dispatched them there to investigate. When they arrive, they find Sigma already inside, who reveals that this must be where the Mechaniloids were being controlled from. Zero agrees, stating that this would indeed be a good location to stay hidden, when Sigma attempts to stab him from behind with his saber. Fortunately, Zero saw it coming, and was able to evade the blow before he was ran through. However, after a brief struggle, Zero is knocked out, and X is forced to surrender. Sigma launches all of the missiles inside the base, which fly toward Abel City and damage the whole city with several explosions. The last thing seen of the city is Sigma standing before the damaged city, announcing his plans of war against the humans.
Maverick Hunter X
Afterwards, the city was briefly rebuilt. However, a bomb planted by Sigma's forces blew up a highway bridge, causing several casualties, including at least one reploid that was crushed underneath a falling fuel truck. X, who happened to be on duty in the area at the time, discovered this and, after finding a fragment of the bomb, immediately deduced that Sigma was responsible. Several Mavericks then proceeded to storm the area, presumably led by the Death Rogumer. X then briefly fought against Vile, before being overpowered.
Abel City is later revealed to be the epicenter of the convergence of the two universes, with Sigma's Lab surviving due to this, possibly being the only part of the city that wasn't merged with Asgard, much like Marvel's Avengers Tower which is located in a merged location between present day of Marvel version of New York and the Metro City from Street Fighter/Final Fight called New Metro City. The lab is used to create the Infinity Buster, as well as Thanos' mechanized Satsui no Hadō gauntlet.
There are four (or six) stages set in Abel City and Xgard:
- Abel City - Sigma's Lab
- Xgard - Throne Room
- Xgard - Final Battle (non-selectable Final Boss stage)
- Xgard - Bifrost Bridge
- Xgard - Bifrost Bridge (Daylight) (story cutscene and arcade ending only)
- Xgard - Underground Prison
- The name of Abel City is a reference to the biblical story of Cain and Abel (Dr. Cain, a resident of the city, being the other part of the reference), where Cain murdered Abel out of jealousy. This could be ironic, as Dr. Cain is responsible for creating the Reploid that destroyed the city.