Well first of all, Nintendo picks everything. I'm sure the third-parties can make suggestions, and occasionally you do see like a spirit event that was clearly promotional, but it's almost always Nintendo/Sakurai choosing stuff.
Next, supplying games for the systems on the NSO and featuring a breadth of series from a third-party in Smash are pretty different things to run a parallel between. The Wii's VC had the Turbografx and the Neo Geo, it's not like Hudson or SNK showed up in Smash before Ultimate.
Also, most of the third-parties with characters only got costumes related to those characters. Square only got new FF and DQ costumes, Microsoft only got Minecraft costumes (considering the Bethesda content was likely all licensed before the buyout), SNK got three costumes from its fighters (which is sort of what Terry seemed to be representing as a whole), Namco didn't get any new costumes. I think Capcom and Konami only got two new costumes each, but Capcom didn't even get an original newcomer, and Konami had no costumes previously. Sega's treatment was pretty much on par.
There's a lot of stuff that we didn't get from a lot of the companies. Chrono, Nier, Space Invaders, Tomb Raider (which was SE at the time), Halo, anything else Rare, Dark Souls, Xenosaga, Soulcalibur, more Tales, Silent Hill, Contra, Ace Attorney, Darkstalkers. It's certainly not just Sega stuff.
You have a point with the costumes now that you mention it. I think the underlying theme is that Nintendo doesn't seem to want to go too deep with the companies already in Smash, which is something I'd like to see 6 rectify for the most part.
That being said, the comment about Hudson does remind me that I genuinely believe we would've had Bomberman in Brawl had the circumstances allowed for another guest character, considering how close Nintendo and Hudson were before the latter was absorbed into Konami.
The key difference is Mega Man and Banjo were, I believe, the second most requested third-party newcomers overall among their respective results. And that was after the first was already included (Sonic) or seemingly unsuccessfully attempted (Sora).
Arle is what? Maybe in top 30? She's not even the most requested Sega character. Fanbase demand is going to pick a more demanded character. Because picking Arle would be completely arbitrary, they'd be just as likely to pick any somewhat well-charting third-party character.
I did already say that I don't believe Arle to be on either of those two's level of demand, the point I was focusing on is that out of SEGA series not represented in Smash yet, Puyo is the one I have historically seen thrown around the most. Of course she's not going to outrank Sonic characters,
no one from SEGA is going to outrank Shadow, Tails or Eggman, but the thing is, I consider the addition of a second Sonic character to be practically divorced from the idea of adding a new SEGA series. It's pretty much process of elimination from there; Bayonetta and Persona are already in, Like a Dragon didn't really see international takeoff until the last couple of years, and every other SEGA series hasn't been as active to justify a consistent push from fans. Primarily, I've been of the belief that they'll put in Shadow as an Echo or semi-clone in base, and then add a couple of new SEGA series during the DLC period.
Though I guess we could also eat crow and, again, see a repeat of Ultimate where Nintendo believed adding Ken was good enough from a Capcom standpoint and left things there. I'd be pretty disappointed if Nintendo does the same with SEGA and Shadow/Tails this time around.
I understand. It would be nice if Sega's crossover games actually tried to include all their noteworthy franchises.
I think the thing is that the Superstars/All-Stars games mostly focused on the franchises with stronger western popularity, which is why you didn't see Puyo Puyo, Phantasy Star, Sakura Wars, or, at the time, Yakuza.
And then with Project X Zone, it was largely the reverse. However, I believe they also had an edict of omitting the cartoony characters, which would entail Arle's usual depiction these days.
I'll let the Superstars/All-Stars games off the hook since as you said, those games were focused mainly on series with international presence. X Zone is quite a bit more frustrating since Puyo's cast has worked in more serious settings in the past--I'm aware that Madou Monogatari's rights are splintered in a troublesome fashion, but I don't think that would've stopped X Zone from using, say, the classic ARS trio in their Compile-era designs. Puyo Puyo 4's designs would've fit X Zone like a glove, in fact.
I'll admit, I did forget that Puyo was acknowledged to a decent amount for the SEGA60 campaign a while back. I think the main things that are irking me right now are the lack of any Puyo guests in Super Monkey Ball (when they'll collab with something SEGA doesn't even own like Monster Rancher) and the overall feeling of being uncomfortably sandwiched between Sonic and Like a Dragon promotions in spite of how much money the series brings as well.
I don't have the numbers, so this is just a guess, but might that be because the games don't sell particularly well in the west?
Also, it does sort of seem like par for the course with Sega where outside of RGG and Atlus, they don't seem to know how to handle their franchises very well.
But it also underscores why Yakuza seems likelier at this point than Puyo Puyo.
Considering the West actually has an active enough Puyo community that isn't just some small circle of diehard otakus now, I imagine the games have to have done at least well enough. But as you've just said, SEGA has been historically incompetent with series directions, it's the reason why it took nearly two decades for a Super Monkey Ball game to come out that people actually liked, and even then I imagine a lot of people still prefer 2 especially with how that game's been cracked wide open for ROM hacks. It's just that the incompetency stings even more here since this is a series that's big enough for missteps to really hurt, but not big enough that you'll have fans scream bloody murder at the company to fix things like how the case is for Sonic.
Though regardless, I'm not really sure one can say Like a Dragon is likelier when the ball is in Nintendo's court, unless negotiations for SEGA over Smash literally only happened as early as a few months ago.
Puyo Puyo gets into more crossovers than some of Sega more well known IPs like Phantasy Star, Love and Berry, Mushiking, etc believe it or not. PS is self explanatory with its popularity but Mushiking and Love and Berry nearly rivaled Virtua Fighter 2 in the arcades and made children come to the arcades again. Love and Berry in particular scared Toei at one point and permanently changed the way Toei marketed Precure.
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Unironically Puyo Puyo is the only time Mushiking and Love and Berry made appearance in a crossover.
I am aware that Puyo Puyo
Quest gets a mouthful of crossovers, but I was more talking about Puyo-related crossovers that aren't using Quest as a basis, like PxZ or the SEGA characters in Banana Mania and Banana Rumble as I mentioned above, or how Like a Dragon content is coming to both Fortnite and Dave the Diver. I really want Puyo Puyo to beat the "relies too much on a gacha game entry" allegations because I know the series is more than just Quest.
Dont even get started on those genesis/mega drive games like Vectorman, Streets of Rage, or Gunstar Heroes that westerners love. Project X Zone was the only time SoR ever made it into a crossover game lol.
Huh, I actually didn't really know that. The funny thing is, during Ultimate DLC, someone used to try and astroturf SoR on me when I brought up Puyo just because 4 was out and everyone liked it. And then absolutely nothing else is happening for that series until that new game they teased comes out...assuming it doesn't end up cancelled.
Goes to show that recency bias is one heck of a drug (I should know.)