Except he said that doing Terry's presentation, when he was a character no one in the smash community really knew about because they are relatively uncultured to games outside of Smash or the Nintendo sphere in addition to SNK having been out of the picture up until more recently.
Yes, that's who he is using this statement for. Terry Bogard and Samus Aran.
That's the level he feels require this sort of addendum. They're not exactly the most underground characters out there.
Also it's not saying a character DOES need to be recognizable: it's saying their moveset needs to be able to be fun to play and that this is valued higher than being recognizable. It's obvious that Sakurai thinks Geno would be fun to play since he's been trying to get him in since Brawl and admitted in 2016 that he thinks this about him.
It's hilarious how someone can see this image and get something that wasn't even intended out of it.
No, if you say something needs to be x, not just y, they also need to be y. They need to be both.
If someone says you need to wear shoes, not just socks, do you think they're saying you don't have to wear socks?
EDIT: Wow, there is more wrong with your post then I first realized.
First off, Steve was thought to be hard to work because of how he looks and how hard it would be to code, which ended up being true coding-wise. Sephiroth was actually thought to be too strong and his sword a problem, but Sakurai had already made Min Min so he decided it was fine. Kazuya got picked over Heihachi because he couldn't work in Smash and Sora almost didn't even happen. So anyone who thought these characters would have problems are justified, and acting like they aren't is purposely ignoring the facts of them having development difficulties.
You can keep listing examples of characters Sakurai was able to overcome reservations on, I'm not sure if you realize it reinforces my point that finding "fun" in a moveset is something Sakurai won't be largely prohibited by in the long term.
The number of times Sakurai has invalidated the belief that a character is infeasible should gradually diminish the value of lobbying those kind of perceived restraints against candidates. Unless you want to abandon the learning curve.
As it is now, I don't take seriously those kind of "x couldn't work" detractions, bar potentially a very select few exceptions if I really had to think about it.
Also, just because a characters is widely popular doesn't mean they could translate to Smash with a fun moveset, as Heihachi proves alone. Also
Geno Boost
never said anything about them being fun or not and you completely assumed his stance on Lucas entirely. He was simply stating Sakurai's own statement on what he and the team values. What Sakurai's own words mean is that even if a character is not as widely popular, as long as they are fun to play via a cool moveset, that matters more. Also people WERE upset because of Mother 3, because Lucas in Smash is some of the very little representation of the game outside Japan, so you are just wrong about that as well. I'll give you that MOST of the outrage was Smash fans throwing a fit about cut content, but acting as if the Mother fanbase said nothing is silly.
If you really think Sakurai needs a character to be both recognizable and fun in equal amounts, I'd like you to justify inclusions like IC, G&W, Rob, and frankly Shulk upon his initial reveal since many gamers had no idea who he was.
Here's the fallacy of detracting from big names. It doesn't make the smaller names that much likelier, because this detraction isn't going to invalidate all the big names. Let's look at your Heihachi example. He didn't choose Heihachi... so... did he pick Klonoa? KOS-MOS? Valkyrie? No. He went with another big name from Tekken, another face of that series. This is the antithesis of what you want to prove.
It's like saying Sakurai/Smash is unpredictable. That's doesn't help the case for anyone. All it does it make some likelier characters seem less likely.
If you really think Sakurai needs a character to be both recognizable and fun in equal amounts, I'd like you to justify inclusions like IC, G&W, Rob, and frankly Shulk upon his initial reveal since many gamers had no idea who he was.
Ok. Here's how I'll justify them. Because even under the specific criteria that already separates them from a standard inclusion (that you've ignored) in which most of those examples were selected, we got IC, G&W, ROB and Shulk, and not Mr. Stevenson, Diskun, Parabo, and Aeron. Even when Sakurai was specifically seeking historically relevant characters, we got the option representing the Game & Watch, not the Famicom Disk System. The NES, not the Satellaview. Why do think even the surprise characters like DHD, WFT and PP have, despite being surprising, all been
very recognizable? Sakurai even said he went with DHD and PP because of how ubiquitous they were.
So even in very contained, sparsely-populated categories, he
still went with the more recognizable option. Though it's also disingenuous to highlight an instance of Sakurai, for example, specifically looking for a retro NES character and going, "see!" as if that applies to your standard inclusion. The retro rep spot doesn't even exist anymore anyway. You're going back to Melee for an example like that, when they still included Japan-only characters.
So, let me turn it around and ask this. Who did we get? Shinjiro, Bianca, Tooty, Billy Kane, Hilda, Mechanica, Jecht, Morag, Marduk and Aqua, or Joker, Hero, Banjo, Terry, Byleth, Min Min, Sephiroth, Pyra/Mythra, Kazuya and Sora? Could the alternative, less recognizable list of characters not be made fun? Of course they could. Every character listed could be made fun with enough creativity. But we didn't even get one not-very-recognizable alternative.
If you're going to say it's not because of recognizability, it's because of general popularity, I'd say well... that's tantamount to the same quality being favored, being "big". Or at least, bigger. Either way, that's going to put the same characters at an advantage and the same ones at a disadvantage.
The fact that you're so downplaying recognizability shows how much it's taken for granted. Can you even go through the Ultimate newcomers and isolate one character who isn't highly recognizable, at least from their respective series? It's an incredibly consistent trend, almost unbroken.
The truth is that Sakurai and his team are adept at making fun movesets, so being "fun" is not a particularly limiting factor, and that's why usually they can almost always add the most recognizable options, because not every fun character is going to be notably recognizable, but most recognizable characters can be made to be fun.