>Imagine thinking that a character from a 24-year-old game that most casual fans know little about is in any way a threat to the success of one of the biggest and most influential RPG series in history.
>Imagine thinking that people getting mad over a character being made a costume is enough to overshadow an entire game franchise to the point that it will directly impact it's sales.
>Imagine thinking that a huge company like SquareEnix would even give so much of a **** about making Dragon Quest successful in the west that they'd avoid pissing off Smash fans via releasing the Geno costume.
No one is thinking that Geno's a threat to DQ or anything of the sort. It's about priorities, when the biggest release of the company in the second half of 2019 is Dragon Quest, why would they want to promote Chocobo or Geno in a Dragon Quest-centric presentation? A company that is extremely run by "suits" like Square would want to maximize the money earned from one of their biggest series, as well as popularize it. Putting Geno/Chocobo in the presentation as costumes would serve to do 2 things.
1. Take away the message that "this is a Dragon Quest presentation. We want this game to succeed in the West."
2. Upset certain "subsets" of the Smash fanbase, which could potentially result in a negative attitude of DQ 11S even before the game releases. This would be a PR nightmare. I know people will say "that would never happen", but they narrowly avoided it in the E3 direct; when the majority of the Smash fanbase preemptively got angry when Hero got shown off before Banjo. Geno is kind of in the same situation as Banjo as a "fan-favorite", and we all know that when a fan-favorite gets deconfirmed/costumed the Smash fanbase tends to act like toxic children.
Now does this mean that Geno IS a costume? No. Again we are just discussing hypothetical's here. Geno may indeed be a fighter. But the "evidence" that his mii costume is missing from the presentation isn't really all that clear cut.
Now if Chocobo came back in the presentation without Geno, that would be another case entirely.
EDIT: Also another bonus to the idea that Square Enix pretty much told Sakurai to primarily focus on DQ is the style of the presentation itself. We went 20 minutes without really seeing any other fighter aside from Hero, not even other Square RPG characters like Cloud. Typically we end up seeing another character within 5-10 minutes of the presentation. Obviously, nothing huge; but definitely a pretty big contrast to the other presentations (even the Joker video).