There are two basic forms of fighter games: one wraps the fighting into a story and treats it as part of an adventure, the other treats it as a sport. On home platforms, the first example of the former is probably Karateka, and for all I know, the first example of the latter may be The Way of the Little Dragon.
While it is by no means obscure, The Way of the Little Dragon is not all that well known either, and precise information is sometimes hard to find. The creators of the game, who firmed as Parsec Software, all have Danish names: Allan B. Pedersen, Jim Rankenberg, Kevin Mikkelsen. But the game was published by a German company, and there is the following quote from Holger Gehrmann:
Parsec used to cooperate closely with Magic Bytes. The whole group was employed by Magic Bytes, and they programmed the piece. Though we threatened to sue, micro partner published the game under the reLINE logo. Soon afterwards we quit the cooperation.
While I'm not sure who threatened to sue whom, it is rather clear from this quote that Parsec Software, and the creation of The Way of the Little Dragon, was closely interwoven with the German game industry. After some doubt I still listed it as a Danish game, since I could locate at least one of its creators.
The game is still relative simple. There are four different non-scrolling maps that show standard (you might say clichéd) Asian, mostly Japanese, locations: a torii, the Fujiyama with cherry blossoms in the foreground, a temple court, the interior of a Buddhist temple. Taking into account that the Amiga and its possibilities were still rather new, they were used well, even if later games might have more impressive graphics.