I don't think Nintendo would refuse Chief just because of Japanese market factor. DQ was pretty much in the same boat for west. Even if you say that Halo has worse situation than DQ, Halo is still massive franchise that can more compensate way beyond Japanese market. Vergen's Minecraft content in Smash finally came true, so I believe King Zell's hints on Halo content on Switch will eventually come to pass. I'm sure MS knows that playable character is the best way to promote and advertise. And they will make sure they will Chief to be a 100% playable character.
Revelation 3:16
"But since you (Nintendo/Sakurai) are like lukewarm (Mii costume/Spirit) water, neither hot (playable character) nor cold (none at all), I (Microsoft) will spit you (Nintendo/Sakurai) out of my mouth!"
Yeah, I’ve always thought that Dragon Quest & Halo were in a similar situation. Dragon Quest is a huge franchise in Japan. New releases for its games lead to massive hype & lines up people waiting to get their hands on the new game. Dragon Quest is a staple of Japanese pop culture, its finger prints are all over the fantasy genre in Japan now. But it’s not a particularly well known series in America outside of hardcore gamers.
Meanwhile, Halo is a huge franchise in the US. New releases for its games lead to massive hype & lines up people waiting to get their hands on the new game. Halo is a staple of pop culture, it’s been pretty influential on modern sci-fi; tons of Sci-fi franchises have Spartan-like armor in them now or weapons similar to those found in Halo. However, it’s not particularly well known in Japan. But it does get a decent amount of merchandise from Japanese companies & it seems to be a known entity amongst Japan’s hardcore gamers as seen in this image.
The two series are even close together in sales. Dragon Quest is at 86 mil, while Halo is at 70
Mil. Though, DQ has a 15 year head start as well as being on both Nintendo/PS while Halo has largely only been on Xbox until this past year. I don’t think the Halo sales numbers have been updated since 2016 so I’m curious as to how the series has been performing on Steam.
Historically, DQ would be more similar to Doom while FF is more similar to Halo. But I feel their cultural significance is oddly similar. If you watch the Japanese reaction to Hero’s reveal in Smash (Particularly when Erdrick shows up) & the American reaction to the Halo: Infinite reveal (particularly the classic armor reveal), it’s reeeeally similar.
So I’m hoping that Nintendo & Sakurai will give America their “Hero”. Maybe they can give Japan their version of Banjo too! I’m not really sure who that’d be though, maybe Arle or Yuri?