Instructions
Keep as far away from Shao Kahn as possible. Position fighters on opposite sides of Shao Kahn if you're in two-player mode so he can only focus his attention on one opponent at a time.
Throw projectile attacks as often as possible: Liu Kang's fireball, Kung Lao's hat, Sub-Zero's freeze attack or Scorpion's harpoon. Be ready to somersault away from Shao Kahn's projectiles by pressing "direction+X" while blocking with "L2." Leave enough energy to evade with somersaults or long jumps.
Long jump away from Shao Kahn's shoulder charge attack by running, holding "R1" and pressing "X." Avoid jumping too much; Shao Kahn has aerial shoulder charge and uppercut attacks.
Pick up Kintaro's head with "R2" and throw it at Shao Kahn when he stops attacking. A hit will cause him to stagger and take more damage.
Run in circles around the arena to avoid Shao Kahn's spinning hammer strike during the second part of the fight. Long jump and double jump when necessary. When he stops to catch his breath, attack with projectile or melee combos. Combos do more damage, but leave you within his attack range. Projectile attacks take longer, but are safer.