For those of you who care, my Game Informer came in today and in it I saw an article from Sakurai sharing his thoughts on Smash 4's development. Just like he's wrote a regular column for Weekly Famitsu, he'll be doing the same for Game Informer for the next few months. Like halfway down the article, he detailed his team's process on character design and balancing.
"First, I decide on a fighter, visualize their moves, snap poses using [wooden posable art] figures, and bring that over to the spec crew as I work on frame timings. The general stats for moves - their speed, reach, and other traits - are more or less decided by this point. I then give instructions to the motion designers, and once they bring back an animation for me, I directly program attack hitboxes and such.
Once a fighter is playable to some extent, I unleash them on the playtesters. We have around 12 of them, and I have them play both two and four-player matches and get back to me on win/loss records and which moves seemed particularly strong or weak. That forms the basis for the long fine-tuning process...
....if I took all of the battle records and tester feedback at face value and tried to make the game balance completely fair, that would make the game boring in some ways. Even if the balance is rough in spots, it's fun if it offers you a wide dynamic range to work with. That's something I hope we don't forget as we keep going."