The game wont be balanced 100%. So far as far as I can tell, the most powerful people will be Goku, Buu, and Frieza since they have the most transformations. Having more transformations means taking longer to reach the final form, so sure SSJ2 Vegeta will be achieved before SSJ3 Goku or Final Form Frieza and he'll be ripping a new one for everyone, but the reward for those who took the risk of wanting just one last transformation will get a power boost higher than that SSJ2 vegeta pwning everyone. However, it doesn't mean that SSJ2 Vegeta will be at a loss. He may not be as strong or fast, but in the hands of a skilled person, he could still be #1.
In short, the power differences will be there, but it wont be so drastic that SSJ2 Vegeta cant handle a SSJ3 Goku, Kid Buu, or Final Frieza. If you're good at the game, then it'll be nothing more than a SSJ Trunks versus a SSJ Goku. There is a speed and Poer Difference but it IS possible to win.