Something that's worth noting is that its harder for any contemporary figure in gaming to be as big as a Mario or Pac-Man not only because they were so early in the media's history but also because gaming is such much bigger now and the industry is far less monopolized by a few ridiculously big franchise figures. There was once upon a time where playing games in North America was often referred to as "Playing Nintendo" as big as Mario is now, his control of the percentage of video game sales was even bigger once upon a time.
Also, dare I say it, the rest of the world and how video game playerbases have formed in other countries. It's extremely complicated because of a multitude of factors: like socio-economic, such as how much leisure money your average person has and how that's changed over the decades, or access to certain platforms / games.
Russia is a really good example of what I'm thinking off: Nintendo has recently established a foothold there, but it's practically overshadowed by the PC games and the PlayStation family (70 % of the console games sold in Russia are PlayStation games). I'm using
this survey from a Russian marketing agency as my primary source. They do talk about Nintendo's position in the country (in kinda confusing terms). I should emphasize that they're a marketing / consult agency (like Niko Partners, the agency ZhugeEx works at), which is really evident in the survey's language use.
The main reason why PC games are in a stupidly strong position there? Russians generally have had less leisure money, and thus gamers there generally turned to free / low cost methods of getting games such as piracy. Counter-Strike and Dota became big games there partly because they were easy to share / pirate, and later on World of Tanks became a massive hit there because it was free to play (IIRC). As far as PlayStation goes, they established themselves in the country earlier than Nintendo and have games like FIFA helping things out for them.
Nintendo... doesn't really have that, they only recently got a foothold in Russia with the Switch. Russia's also not a country where internet cafés thrive IIRC, unlike Japan, South Korea and other Asian countries.
I can't in good faith say that "Other Countries" have been a big reason why a Smash character's gotten in. "Other Countries" currently make up ca. 10 % of the Nintendo playerbase
according to Nintendo's own data, after all. Except for maybe Terry, but Terry's very much a known figure in Japan too and Nintendo have started to count LatAm (one of the KoF strongholds) as part of the major Americas region together with NA, so nah. But I can't entirely dismiss the notion that potential and ongoing expansion is alluring to Nintendo either. It's a primary reasons why I'm following how the Switch fares elsewhere - particularily China* - but also other countries who have not been traditional Nintendo strongholds.
*Nintendo has tried to gain an (semi-)official foothold in China since the early 2000s, with the iQue series of consoles. As much as Nintendo's tried to avoid political messaging in their games, the company has not cared all that much about the geopolitical going-ons in the background: only if it's something that affects Nintendo themselves like too high tariffs (which is the main reason Nintendo exited Brazil 5ish years ago IIRC) or high barriers of entry in a country.
I think it was the idea that fighting game characters would be directly translated without any sort of imagination, which is pretty silly in retrospect.
EDIT: According to
Dinoman96
's citation, it sounds like the idea indirectly came from Sakurai himself, which would of course make it stronger.
Honestly, that idea might have at least some basis in reality if not outright true - Sakurai did IIRC map the inputs to both the A and B buttons, something I imagine is meant to evoke the arcade experience of playing Street Fighter / SNK's fighters. He having hang-ups about how to translate say Heihachi or other fighting game characters could stem from those arcade days, although we do need direct confirmation from Sakurai himself that that's indeed the case.