Context is important.
He was saying this in reference to Tekken.
“There have been a lot of requests in recent years to add Kazuma Kiryu in a fighting game, be it Tekken, or others ... What do you think? Would you like to make a fighting game based on the Yakuza series?”
“
We do get this request a lot. Of course there are exceptions, but fighting games generally have female characters, and personally I don’t really want to see Kiryu beating up women.”
However he has had an interview where he was asked
specifically about Smash.
IGN: SEGA has put Sonic, Bayonetta and Joker in Super Smash Bros. Any chance Kiryu will make an appearance? Majima would make a great echo fighter.
Nagoshi: I don't think (Smash Bros director Masahiro) Sakurai is interested, haha. If he asked I’d say yes, but I don't think he wants them!
One publication reported “Kiryu from Yakuza reportedly disconfirmed for Smash Bros.” Or something like that, provided the quote completely out of context, and now we’re stuck with this weird disconnect between what was actually said and what the Smash community thinks he said.
Unfortunately this is a misunderstading that will continue for a long time, just like always. That's why I strongly dislike clickbait news. Even if the article itself provides context in the complete text, the great majority of people will only look at the title.
And people will spread that info. If said info is a blatant clickbait or a sentence out of context, well, there's almost nothing you can do against it.
As a side note I also have concerns that Nintendo may not see Phoenix as a proper candidate, and by Nintendo I mean traditional corporate Nintendo giving the extremely creative Sakurai orders to develop x or y character. When looking at the Capcom pool, I'd be very impressed if the Nintendo execs went with the lawyer dude over characters who have much more defined fighting experience and history, and more profitable series to boot. This is much more unfounded and I don't want it to sound like I'm questioning his moveset potential, I just don't exactly see Nintendo as being creative with their off the wall picks in the same way that Sakurai is, making Phoenix feel more like a decision that would be made for the base game by Sakurai himself.
Should have saved some of this for his RTC tomorrow, ah well.
I kinda agree with this. Like, Phoenix is one of my most wanteds and I'd be delighted to have him in Smash. And while I think he has a decent shot, I'm also uncertain if Nintendo execs would really go for him. It could happen, of course, we will always lack a lot of info and context so who knows, maybe there has been talks for including Phoenix in Smash for a long time because Nintendo wants to continue their partnership with the series and help Capcom with boosting Ace Attorney's popularity. But that's just... a theory.
Maybe I'm just being "pessimistic" but I don't think the Nintendo higher ups would have Phoenix Wright as their first choice for a Capcom character.
I think Phoenix just fits smash like a glove. Ace Attorney games feel more like Nintendo than DMC.
Maybe? But not really?
Like, I get why you're saying that. Ace Attorney games have a very particular aesthetic and presentation, being very colorful games. But beyond that? I don't really see that much of what Nintendo is known for in AA.
Unironically, I'd say Devil May Cry is the series that actually feels more like Nintendo. When people thinks of Nintendo they usually think of "cartoony and likable characters", but also the "gameplay first" philosophy. Which is literally Devil May Cry philosophy (or any hack n slash game for that matter). Replayability is a key part of the experience, besides also offering a good gameplay experience and quality controls.
Of course, the tone and the aesthetic of the series isn't very Nintendo, or at least, the Nintendo most people associate with. In terms of visuals and presentation, I can agree with Ace Attorney feeling like it could belong to Nintendo, but everything else? Not really.
The other important thing to note that I briefly touched upon but I wanted to acknowledge separately, Phoenix may have strong ties to Nintendo... but so does Monster Hunter, so does Chun-Li, so do Jill and Leon (a lot of people don't realize this one). Arthur, whoever.
Capcom has an extensive history with Nintendo and I wouldn't really even say Phoenix is next in line if we were to exclusively judge from that Nintendo lens. Which as people have already acknowledged is no longer the be all end all but yes, it does have its benefits.
Being profitable and relevant to Nintendo helps by default because it keeps those characters fresh in their mind. But within Capcom this can be applied to just about every one of the top contenders. Even Dante with his Switch ports at this point.
This is certainly a point people always makes in Phoenix's favour, and while it's totally true that Ace Attorney has strong ties with Nintendo... that is also the case for Monster Hunter, Resident Evil or Street Fighter.
I just think the "Phoenix Wright is the honorary Nintendo character from Capcom" mentality has somehow became a fact after repeating it so many times. Not suggesting it's a lie, but there are reasons to consider that Ace Attorney is in a similar position in comparison to Bayonetta, or at least back then.
But Monster Hunter was always a big selling point of the Nintendo 3DS. Maybe the series became super mainstream with Monster Hunter: World, but it already was incredibly popular before that. Street Fighter has, for the most time, always appeared in some form in each Nintendo console, including the 3DS version of Street Fighter 4, and then you have Resident Evil, which was intended to be a GameCube exclusive back in the day with REmake, RE: Zero and RE4. Obviously, that was a very HUGE deal back then and it was a move from Nintendo in order to attract people who wanted to play "adult/mature" games.
Resident Evil 4 was literally a era defining game.
So I don't know. The connections between AA and Nintendo are there and are undeniable, and that's certainly a big point for Phoenix Wright. But I always felt relative confusion when I read people using that point in Phoenix's favor over the rest of Capcom pausible candidates. I can see that point being useful for AA over series like Devil May Cry, but against Resident Evil or Monster Hunter? The point still works, but it isn't that strong against those series if you ask me.
Look I'm just saying, since I personally want Devil May Cry to be in Smash, it probably isn't happening since God hates me.
Don't worry. In that case, we'll get Demi-fiend, which will also rep Devil May Cry.
SMAASH! Puppy
said this here: 
smashboards.com
