First and foremost go to the arcade settings and change the difficulty to the lowest settings along with upping the health sliders and lowering the time to it's lowest setting. These will all make the final boss exponentially easier.
You can either use Wolverine in order to unlock the Avenger trophy at the same time or you can pick a pick easier characters such as Cable or Cyclops who can spam projectiles to keep the enemy at bay. Both of them can do this by spamming Quarter Circle forward + Square or Triangle. If you press both square and triangle, you'll do the ultra with all three of these characters. You should do this when given the opportunity. Use assists to help, though don't spam them as the AI can get some good damage on your assist partners while they're out.
Once you reach the final boss, simply guard for the first two phases. You'll win due to time out because he only has one health bar to your three. For the final bit, use ultras to help your cause and damage the boss but continue to block in hopes of winning by time out. It may take some time to learn his attack patterns, but it's much easier to just block his attacks than to avoid and counter them.