So after Today I think I created a New theory, It's called Iconic theory
So if you compare Fighter Pass 1 and Fighter Pass 2, you'll realize that the 3rd party characters are more Iconic in FP2 than in FP1
Steve is More Iconic than Banjo, Kazuya is more Iconic than Terry, and Sephiroth is more Iconic than Hero. Hero might be more Iconic in Japan perhaps, but Sephiroth is still very Iconic there and he's more Iconic globally
With this in mind, there are some Potential questions and Answers I might have
Why a FP2 was created?
Smash is a Popular game, but it's not immune from the Diminishing sales that plague all games. Having characters like Steve, Sephiroth, and Kazuya helps offset this phenomenon as best as they can, because overall they are more likely to have more appeal than the characters in FP1
Why were they not just added in FP1?
Besides the Above, there are potential other factors
Steve and Most likely Kazuya were definitely because of Implementation issues. In comparison, Banjo and Terry seem to be much more simple in comparison to these 2
Sephiroth is Odd in that he's probably was easier to Implement than Hero, with perhaps the harder part figuring out how to balance his Range. The thing is though is that Dragon Quest was relevant during FP1 in the Same vain Final Fantasy was relevant in FP2, with Dragon Quest 11 and Final Fantasy 7 Remake Respectfully
We see that Square in particular probably likes to have their franchises content in Smash revealed around a time their franchise is very Relevant if possible. Had FF7 Remake been relevant around FP1 and Dragon Quest 11 around FP2, I Imagine the order would have switched. though if this happened, then Iconic theory would have a hole in the theory
EDIT: Also unlike the Comparison between Banjo and Steve, and Terry and Kazuya, who all come from New franchises, Sephiroth already came from a franchise represented, unlike Dragon Quest
Why the focus on 3rd party specifically
1st parties and 3rd parties are chosen Differentially
What could this mean for the future
If we use this theory, if we get a 3rd party character, it's gonna be one that's more Iconic than Joker, whether that mean more Iconic in the Genre he is in, or a Sega character that is more Iconic than Joker from Persona 5
However this theory is just for fun, I'm not sure if it should be taken seriously. I will say that it is factual that the 3rd party characters in FP2 have bigger Global appeal than the ones in FP1, but I don't think it automatically points to specific characters, and it's very possible this pattern is broken with CP11