The Game and Watch isn't too shabby. Standard stuff I'm sure.
Okay, down to business:
0:05-0:10 - When you connect with Dancing Blade, try to finish it off. You allowed G&W to grab you out of a Counter because he was patient enough not to rush in. Also, generally start approaches aerial-wise, where you have more control of where you're moving. Dancing Blade doesn't give you much control as a Fair does.
0:25-0:26 - Shield Breaker as an edgeguard doesn't work in this game. Auto-sweetspotting the ledge means it won't hit generally. Game and Watch does not have bad range, do not underestimate it. Instead, you can poke around with Dtilt and adjust properly by using the IASA frames to change an action quickly after one Dtilt. Play a safer edgeguarding game with Marth overall.
0:42 - You foresaw that Dair. You could have used Counter to stop Bug from spamming the move so much. Offensive Game and Watches suffer a lot from Counter and Marth's defense in general. You don't have to be all aggro with Marth. Because if Game and Watch knows your offensive game, he'll run right through you with that turtle.
0:58 - Yet another Dancing Blade you could have finished. Were you nervous or something? DB is not hard to time in this game. You gave up your advantage and allowed GW to punish.
1:03 - You got a Shield Breaker off, so why did you just roll into Bug? Shorthop a Fair and if it hits the shield, you'll damage him due to a shieldstab. If you miss, just DI backward to try to evade retaliation. Or, if you don't want to approach, let him approach and Counter, or drop into the ledge and do something there if you think it's smart for you to do at that time.
1:09 -Big mistake here. You DI'd away from GW who is doing Uair. If you DI'd in, you'd fly up a bit, but unless Uair sweetspots, you don't die. Instead you DI'd away from a small threat and ate a Fair which is the bigger threat.
2:00 - Nice Dolphin Slash here. I recommend that you learn how to tech/ukemi Dthrow so that you can fake out with it instead of just rolling away from the ground. Mixing up your escapes can throw off GW's follow-ups to the throw.
2:54 - You broke his shield. You just got respawned so all your move decay is gone. Therefore you should have charged up a Shield Breaker instead of a Fsmash, as your Fsmash has already decayed from your over-usage of it. If this happened later, and your Shield Breaker was still decayed, but Fsmash wasn't, than you would have responded correctly.
3:20 - Counter Usmash. Really, just DI into it and Counter and chances are you'll Counter him so hard he'll never Usmash again. Instead you tried to use Fair and whiffed it. The match ends and you lost $2. But you paid for a learning experience in a way.
Overall: You do not seem to read your friend very well when he is Game and Watch. When he is high up in the air, chances are he'll use Dair. Dair spammers capitalize on your bad spacing and predictability. If you caught on to the spam, you would WILLING stand right below him, do a Counter and get that stupid key out of your face. This one also minimize his usage of the move since he;s getting punished for it.
You also need to stop using Shield Breaker so much. People say that Marth does not use the move enough, and as shown here, some take the advice too seriously and spam it when there are better moves. Against GW, stick with quick, safe moves. You don't have to try to gimp him every time. Use your range, it is what gives you the advantage here.
You gave up your advantage too much and you weren't agressive enough when you needed to be and fell for too many things that could have been better avoided. Basically, learn to play smarter and that's all I can tell you. You grasp the basics well enough to use them but do not apply them efficiently.
And as Pierce said, use more tilts. Dtilt is good for poking around and forcing G&W to an aerial approach, from there, you can retaliate. If it connects, you can always follow up with Dancing Blade or a Fair.
Nair isn't too good on G&W because he is short. Try to delay your SHNair so that both strikes hit farther down if you need to use it. But overall, it's not necessary to use it in this match-up. Offstage, this can kill G&W, but on stage, it makes most GWs resort to ground approaches or wait until Nair is finished then punish you. So yeah, Nair isn't the best idea. If GW is spamming aerial-approaches, just use Ftilt and they'll be knocked out of the way.
Also, try to be more observant on your friend's tactics. Even though you said you battle Bug's GW often, it seemed he was the one that observed you and your play-style and read you like a book for the most part. He was patient, you weren't. The two colliding play-styles left Bug the victor.
So be observant, play smart, practice, and you'll eventually be very good. As I said, you know the basics; you just need to apply them. =)
Oh, and don't charge up too many smashes. Once in a while it's very pressuring to the foe, but too much and they'll just run in and punish.
Well, I'm done ranting. Would've posted this earlier but I needed to kill cut my lawn. >_>
