Do you guys think that Rex being a premium bonus Mii Costume in the first pass affects his chances for the second pass? Wouldn't that pretty much be selling the character twice?
I find the way that Nintendo handled Xenoblade Chronicles 2 content in base game Ultimate combined with how Xenoblade Chronicles 2 differs from ARMS to be suspect for Rex's inclusion TBH. Xenoblade Chronicles 2 got a fair amount of content in base game with several Spirits, three songs, and the Nia costume in base game alongside Rex as the Fighter's Pass Bonus Costume. Not a ton of stuff, and obviously anything Smash can always be expanded upon, but a solid little chunk of content. The choice to put Three Houses content in, but not the recently released Xenoblade Chronicles 2 always felt like it spoke to certain priorities to me with how they were approaching those two series. It really depends on how early in the process Three Houses was chosen to receive content versus Xenoblade Chronicles 2. The further removed from XC2's release, the more its success would have already been known to Nintendo as XC2 was a considerable step up from XCX's sales figures.
Now I initially considered ARMS out of the running too, but the difference with ARMS finally getting content versus XC2 is that ARMS had no playable fighter in Smash versus the fact that Smash had Shulk already pulling weight for the series and about to be in a titular role as one of their primary 2020 releases. Having a fighter in Smash helps represent an ongoing series, and while Smash isn't really all that much to save a series, it is additional exposure that Nintendo is generally going to want for any ongoing series they're continuing to invest in. In that context, Shulk not only pulls the weight of Xenoblade Chronicles as a series in Smash, but also accidentally would end up the advertising rep for the most recent Xenoblade at the time of Fighter's Pass Volume 2. ARMS didn't have such a reality, and if it's a series that Nintendo intends to continue in the future, choosing to invest in it the way they did makes a ton of sense. Another ARMS free trial plus three months of Smash discussion about ARMS leading to Min Min is a pretty solid push that stands to benefit whatever comes next for the series.
That puts Rex in an awkward spot though. Rex remains popular as an option, but as I've pointed out, Xenoblade Chronicles 2 has a fair amount of content, XC is already in Smash, and it seems like Rex will probably not continue as the main protagonist into future XC projects. He's in no way impossible, but I also do question how likely he is at this point. It really depends on what benefit Nintendo sees in including him and if they're happy to let things be as they are or if they want to push other options. XC is a growing brand, so you'd think that Nintendo would choose to push it like they have tended to push Fire Emblem in the past, but Rex could just be the Gen 3 or Gen 5 Pokemon of this game. The character that misses the roster due to bad timing and a different set of priorities.