And again, remember this is only the Ki-43-I model. Production stopped in Feb 1943 and moved to the Ki-43-II. The -I kept serving in 1943 as it was replaced. The -II began service in that summer.
Differences from the I to the II:
-I apparently had no reflector sight
-II added a reflector sight
-I had a 2-blade prop with only 2 pitches (not fixed, not constant speed)
-II had a standard constant speed 3-blade prop.
-I had no protection and pilots complained about the effect of superficial damage
-II added basic pilot armor, some fuel tank protection, etc
-I performance was much lower
-II had a more powerful engine, ejector stubs for more thrust, shorter wings for more speed down low.
(It will be interesting to see if HTC can model a 2-pitch screw like that. Maybe add part of the engine-over-rev from the WW1 arena onto the Ki-43-I, where you overrev and damage the engine?)
There are more, but from a top-down I think those would be the main characteristics that separate them.
There is an interesting comment from the warbirdforum.com on Joe Baugher's Ki-43 page. It says:
...when the 64th Sentai was reequipped with Ki-43-II models in April 1942, both nose guns were large-caliber. However, the rate of fire was so slow that many or most pilots had one gun taken out and replaced with a faster-firing 7.7mm. These were the models that fought the AVG on 28 April 1942 near Lashio, Burma.
So while the 12.7mm may have been more common on the -II (I can't say for sure) it appears the same problems were still in place that drove the -I to use the mixed armaments.
(Link:
http://www.warbirdforum.com/hayabus2.htm down towards the comments area)
EDIT: Also regarding the -III (just as a side note) these did not begin production until December 1944. The war was nearly over. They were used in homeland defense often in the suicide role. They had more powerful engines but most of them still had the same 12.7mm armament. Some are reported to have had 20mm installed, but how many and where and when, is unclear. There's a bit of a debate from what I gather as to whether that's a prototype or a field test rather than a production run.