Falco has quite a bit of stuff on Sheik.
For one, Sheik's game revolves heavily around defensive play, needles, and spurts of attacks. Falco doesn't suffer against defensive characters (who don't have a broken downsmash) and excels at pressuring shields and keeping on the offense. It's very rare that a Falco will be playing a Sheik's game in a match, and the lasers amplify Falco's overall control of the match.
In the early stages of a match, Sheik suffers at the hands of crouch cancels and needs to land grabs and put the opponent on defense long enough to get them out of crouch cancel percents. Getting a Falco on the defense is quite the feat, and until that happens things just go from bad to worse for Sheik. Some serious mindgames are required to neutralize a Falco, but for Falco the only thing required is Down+B.
Any scuffle Sheik gets into ends up with the Sheik flying upwards from a shine. Thats just how Falco works close quarters, and this fact leads entire stocks to be lost by Shiek whenever she organizes an approach. Falco just has too many turnaround attacks and good crouch moves for a Sheik to play offensively. Don't get me wrong though Sheik can easily destroy Falco, but that usually happens when the Sheik gambles near an edge and lands a quick grab; it doesn't just happen straight out. For Falco it does however as Sheik is a near-perfect weight for the shine and uptilt.
Both characters recoveries suck but edgeguarding definately goes to Sheik. I've seen and experienced too many low percent deaths to be convinced otherwise.
In conclusion, if Sheik had a better clearing move or just plain was better than Falco then it might be an even match.
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