A subject that just came back to my mind:
I remember back in the day, I saw people telling others that characters, like for example: Adol from Ys, Laharl from Disgaea, Reimu from Touhou, Lest from Rune Factory, Klonoa...etc are not possible because they would not generate enough Fighter Pass sales. Does every single fighter in a Fighter Pass really need to drive a lot of sales ? I think one hype character at the beginning would sell a lot of passes. Plus, I imagine a lot of Smash fans would buy them even without knowing any of the characters in the Fighter Pass anyway.
I don’t know; it always seemed more like gatekeeping certain series from Smash than an actual concern. I mean, I doubt Min Min pushed that many sales on Fighter Pass 2… and she’s there anyway.
It's not so much driving sales of the pass, it's the fact that these characters have to be compelling as standalone content, because they are sold that way as well. The pass can be leveraged by a few standout characters convincing people to buy in bulk - or for people who aren't discriminate about who the character is, they'll buy whoever - but not everyone buys that way.
Mix that with the fact that millions of dollars are pumped into character development. Each (original) newcomer costs at least hundreds of thousands of dollars to make, and DLC characters with their own trailers, showcases, and often more complex movesets and licensing fees even more so.
Sakurai might view Smash as an artistic endeavor. We might view it as a collection of characters we'd like to see. But Nintendo views it as a product. And Nintendo foots the bill. That's not to say there's no room for smaller characters (especially in base), but if Nintendo is going to be spending multiple thousands upon thousands on a single character, you want a preferential return on that investment.
That could come in the form of them acting as promotion for another one of your games (Min Min, Byleth, Pyra/Mythra). Or it could come in the form of a character who would be appealing to a bigger audience, giving a better chance of netting more people, getting a better return. Another reason we see few characters of lopsided popularity. Don't forget DLC isn't just for those who already own the game, potential consumers get lured in by particular additions.
So, if they're going, for instance, to Namco, do they take a character from Tekken or Dark Souls or Tales, or do they take, as per your example, Klonoa? Klonoa is cool and all, he fits with the cast, but... you pick him over those bigger series, you're leaving money on the table. Even if you opt for a fanbase favorite, you might not be looking to expand the audience, but you're going to appeal to a large number in the existing, DLC-buying consumer base.
Even as a fanbase favorite, a character like Geno appeals to such a smaller demographic than Cloud, Hero, Sephiroth, etc., so there is a threshold in which selection of a certain character becomes questionable from a business perspective. And even fan inclusions like Banjo were scarce among the DLC.
Of course it's not a "rule" that they can't go for the type of character you list, but why they would be few and far between is indeed pretty well reasoned.
about it than we may give them credit for.
