I don't think Sheik needs nerfs; I think she's being overrated because her neutral is so good. She lacks explosive kill power like most of the other good characters; she really only takes stocks if you either make multiple mistakes in quick succession (to get drug off-stage) or get to over 150% whereas most of the other strong characters have ways to kill starting at 80-100% off a single mistake. That's kinda a big deal; I have to play around Sheik's complete package of pressure, but I don't actually have "that button" I have to look out for like Diddy uair, Sonic usmash (or bthrow really), Ness "half his moveset", ZSS Boost Kick, etc.. The closest thing is getting sniped by Vanish; if I were going to nerf Sheik (which I wouldn't do), I'd slightly reduce the kill power on Vanish. Really though, I think she's built just right; she's a good character, but she makes the very real trade of the ability to get wins very fast for her consistent threat level. Characters like Sheik have been dominant in past smash games which probably increases her appeal, but precedent
Of course, the only nerf I'd implement in this game if given the driver's seat would be a very, very slight nerf to Diddy uair kill power (would kill probably about 8% later in most situations). I feel like most characters are viable in the current environment and that it's much easier and more likely to make a good game to focus on bringing in stragglers instead of tearing down leaders in this kind of game. I think the "only buff always!" philosophy is simplistic at best for game design, but this game's particular balance is well suited for it. With custom moves being a system as well, you really have a lot of ways to push characters in different directions without having to make sacrifices. Oh this game would be fun to play with the balance, but that's not really possible so I'm not sure it's the most useful thought experiment.
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I don't really want to have a long Pac-Man argument, but I'm definitely +1 to the side of Pac-Man being bad and don't really think a better grab would suddenly make him good just decent. I just look at him, see hydrant as one of his strongest moves, see how easy it is for hydrant to hurt him more than help him when he puts it out (usually he tries to land behind it and, before he gets a chance to take advantage of the cover, has an fsmash'd hydrant flying at him), and really struggle to see him as good. The good characters don't have their strong tools so easily turned against them, and how just flat out unimpressive his normals are doesn't really do much for me either... I simply don't believe he beats Sheik and goes even with Diddy and Yoshi; on what game theory does that even work? I foresee Sheik and Diddy just rushing him down and winning on the basis of having better buttons than he does and Yoshi kinda doing the same but also winning the long range game since eggs are better than all of Pac-Man's projectiles. If Yoshi catches a fruit especially and just holds it while chucking eggs, that's going to be a nasty situation in which Pac-Man will be forced to approach...