Pick Nadal (Strong Defense) and just hit towards King's forehand (left side of the screen). Once your "Power Shot" is fully charged, hit a crosscourt winner. Just beat him 2-0, 40 Love on hard using this method.
There's theories on why he doesn't appear, but I think it has to do with how fast you complete Arcade Mode (look at the timeclock during matches). I got faster each time. He showed up the fifth time I played. I unlocked Duke on my third attempt. Beat King in 3 minutes once I faced him with this strategy. Check PS3trophies.org for theories. They got a good 4 page discussion there just on this issue.