Gamasutra's Brandon Sheffield spoke to D4's Shinobu Shimizu about the company and their Neo Geo plans. Basically, D4 plans to release SNK Playmore properties (and, as shown by World Heroes, ADK games as well) in a very faithfully-emulated form, with the possibility of a few concessions made to new gamers. Selectable difficulty in Magician Lord is cited as such a change.
D4 already has experience with enabling retrogaming on rare systems -- they got their start with the 1Chip MSX device, a new, cheaper version of the MSX computer (pictured). It is no surprise, then, that D4 is behind the plans to put MSX games on the VC.