Personally, I think Mario spinoffs would be a better place to start it since the investment and payback don't need to be huge. Geno can make better money than most secondary or generic Mario enemies in DLCs. And as the information provided enough, Mario Kart technically sells better than Smash bros, so I don't think Geno making appearances in Mario games wouldn't boost his public reputation.
I want Geno in those spin-offs , Mallow , Smithy , the Axem rangers , too !
And yes , these characters appearing in any Mario spin-off will be a huuuuge boost for them.
The main issue is that campaigning for a Mario character to get in a spin-off roster is much more complicated... because the fan demand for specific characters to be added to these games is way smaller compared to Smash Bros.
A lot of characters that are added to spin-offs like these take stuff from the most recent Mario games :
Mario Kart Double Dash having King Boo and Petey Piranha for Luigi's Mansion and Sunshine
Mario Kart Wii having Rosalina and Dry Bowser for Galaxy and NSMB
When a fan-favorite get added through DLCs , it's mostly because they were a character in a previous Mario Kart game. (Dry Bowser for MK8 DLC , Bowser Jr./Dry Bones/King Boo for MK8 Deluxe) And well... People are still asking for characters like Diddy Kong and Petey Piranha to come back... And Nintendo don't bring them back. They have Mario Kart Tour , the game where they could focus on fanservice due to it's gacha nature , and they didn't add them.
And of course , the big elephant in the room : Nintendo doesn't own Geno , and they have a big enough Mario cast anyway , even without adding RPGs , DK , or Wario characters. That's why I don't feel confident in the "He should be in a spin-off/New Mario game in general before Smash" mentality.
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I know that Geno has some hard competition , but I'll support him regardless :
BK was in a similar spot , when he was considered dead outside of fan support , and Microsoft had Halo/Minecraft as big flagships franchises they could add to Smash. But instead , Sakurai went with BK because he knew he would bring the warmer reception , and was well aware of his Smash demand. I know he has his own franchise compared to Geno... But honestly , I lost count on how many people told me that "it's just a small relic of the past , it was just 2 games on the N64 , it's not at the same level as other beloved but small franchises like Starfox" or something like that.
We're also getting in the second DLC wave of a One year and a half old game. People who are still willing to spend 30 bucks on 6 characters (When it's half the price of the base game) are before anything , Smash and Nintendo fans. Not saying you can't be a Nintendo fan without owning others consoles of course , but you gotta have a target audience. And in that context , i think Geno could fit pretty well : since he's before anything else , an hardcore fan-demand , while representing the roots of Mario RPGs with the timed hits and overall unique character designs in the context of the Mario world.
That , and the fact that despise long debates , almost nobody saw characters like Joker , Terry and Byleth coming. While Hero had leaks going for him , and BK a lot of smaller stuff that kept adding up for him.