In challenge mode, play through time attack and complete level 40. When this is done, you will get a message saying that another player has arrived. To select Geese, highlight Billy, hold R and press any button. To play as Goenitz, highlight Rugal, hold R and press any button.
Kusanagi and Orochi Iori
In challenge mode, play through time attack and complete level 20. When this is done, you will get a message saying that another player has arrived. Kusanagi and Orochi Iori will now be unlocked. To select Kusanagi, highlight Kyo and hold R, then press any button. To select Orochi Iori, highlight Iori and hold R, then press any button.
Orochi versions
How to unlock Orochi versions of Chris, Shermie and Yashiro & play as Kusanagi. At character select do the following below.