Custom Characters are unlocked in game after completing level 1-3 and unlocking Survival mode. Once unlocked, you can earn outfits through the Prize Machine on the main menu, or by spending coins.

Prize tokens are found on the Special Fighters in Survival mode and are used in the Prize Machine.

An image of the Special Fighters and Prize Machine in game.

You can collect all outfits in game with no purchases necessary! 😄