Each faction likely has its own fatality. Like Ed said, the first thing you do in the game is choose a faction. So with whoever you're playing, when you do the input for your faction kill fatality, someone/thing jumps in and finishes the opponent.

Thats my guess anyway. Haha

But would that mean that if I picked, say, Kotal Kahn for the Special Forces, I could summon a flamethrower drone? A bit out of character

I find it strange that they chose these factions, since not every character fits these 5. Definitely hoping this will be solely for online faction mode and not the story nor single player modes. Maybe it's just a new and you can still choose any character, but then the factions would have very little meaning. However, I would hate if Kotal Kahn for example is 'pushed' into one of the factions. I rather they stuck with realms so: Earth, Nether, Chaos, Edenia / Heaven & Outworld.

I'm a little concerned that a good portion of characters don't really seem to be represented by the factions

Boon stated on twitter that you can pick any character no matter which faction you choose to represent. So we'll see how it works out.

U can choose whatever faction u want. U can play Cassie as BoS faction.

And if you don't like any of 5 main factions, u can always join the 6th faction (Netherrealm, Outworld, Chaosrealm...) that changes every week.

Guys, guys... if we can choose whoever we want that means...

Nope. 5 Factions. The sixth faction happens one day a week and is an enemy to the main 5 factions. So for that day, instead of fighting each other you work together to defeat Outworld or the others you mentioned.

Then I don't see the relevance of choosing a faction..hope it doesn't affect offline too much, as Ed Boon tweeted that you do contribute of a faction playing offline.

It's just for fun.

It affects everything. You earn points for beating story mode, doing fatalities, doing ex moves...EVERYTHING.

I do wonder though: Subbie is second only to Scorpion in popularity so most people will probably pick the Lin Kuei, casuals especially. They could just stroll to victory

Indeed. But since the war resets every week I'm sure people will change factions weekly. Eventually someone other than the Lin Kuei must win right?

I was super shocked to find out that the Faction War is shared across all platforms. So far example, points earned by me on my PS4 will go to Black Dragon while you on your Xbox One will be earning points for Special Forces. That's amazing.