Download the latest release:
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The Alpha2.7z folder contains 2 files, named sz2u.07, and sz2u.08
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Open your fightcade 2 roms folder. Inside it is a subfolder called FBNeo Roms.
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In FBNeo Roms, there is a file called sfa2u.zip.
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Drag the three files into sfa2u.zip. It will replace two existing files.
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Open fightcade 2. You should see the new colours once you've picked a colour.