Just as an idea:
I would very much like to create my own arena character and level her up. Each won fight could for example grant a certain amount of XP and after achieving a new level you would get an opportunity to select a new combat skill or a new piece of equipment. Also, is it possible to create new arena maps using the modding tool?
I remember this game called "Gladius" for the original Xbox, where you fought in arenas in turn-based combat and leveled up your gladiators and stuff. It was fun.