Does Nintendo/Sakurai have a "preference" for non-Western created 3rd Party characters? It's a possibility.
Do we really have any evidence that supports this? Not really. Very few Western-made 3rd Parties get enough notable requests to begin with to warrant consideration.
Though an example of a Western video game character (and indie game character) that has potential to break the mold? Shovel Knight. Nintendo has shown to be rather favorable towards him in particular.
I don't think there is a Japanese bias. Nintendo characters are all made in Japan (Diddy being the only exception). The only question is third party characters who are supposed to be a guest. But, again, Smash tends to pick from the biggest, long running series, and these tend to be Japanese. With the exception of Bayonetta (who should have never been in the game), all of the guest characters have been from massively successful and long-running series. So I think it's coincidence more than anything.
I think Shovel Knight is more likely than Shantae... but still, having both in Smash would be awesome.
I think Shovel Knight is one of those characters who shouldn't be in Smash.
And I think that brings one of the major issues for Smash going forward and it's how it handles characters. It was that the most popular characters were guest characters. Sonic was popular for Brawl. Megaman was popular for Smash 4, and Pac Man was somewhat popular (though I think a lot of people didn't like the fact it could be awful "I'm a meme" Pac-Man.). With the inclusion of these three characters, most fans seem to think it was perfect. I remember hearing that the trio was just right. Of course, thereafter, Sakurai kept adding guest characters. Before the last Direct for Smash, I heard sentiment from Nintendo fans (such as the Nintendo sub reddit) that they just wanted Nintendo characters.
Sourcegaming did a poll before I left. One of the questions was "who would you cut." Besides the clones, the highest characters were Cloud, Corrin and Bayonetta. Ryu was slightly higher but nothing too crazy. Sonic, Megaman and Pac-Man were normal as well. I think the results show something we haven't considered. There is this assumption that we must add more guest characters because they are popular while Nintendo characters are not.
But I think the reality was that fans never really wanted guest characters that much as they wanted guest characters that related to Nintendo.
Snake is a good example of this. Despite what some say now, Snake wasn't that missed when he was cut. In fact, everyone just kind of expected it. The whole missing Snake thing is only recent, and I'd argue characters like Wolf and Ice Climbers are characters fans want more. And look at which characters were the most popular. Sonic is considered Mario's rival. Megaman started on the NES. Pac-Man is a classic character who just kind of fits. Ryu at least had his big break on the SNES (but I don't think fans see it this way anymore which is why he's never been as popular). This is the same reason characters like Bayonetta and Cloud are so controversial. Even though, yes, there is no hard and fast rule they must be on a Nintendo system, fans expect it.
So back to something I mentioned before where everyone said: "we need guest characters because they are popular". Look at things now. The most popular characters are all Nintendo characters (the only exception may have been Snake who is a veteran now). Most of the major third parties series have been hit. And the biggest successes coming out of Japan are Nintendo. Animal Crossing New Leaf broke 10 million. Pokemon Sun and Moon broke 14 million. Breath of the Wild will likely sell 10 million. Splatoon is a big hit in Japan. Fire Emblem is having the best sales its seen in its history. And Mario is Mario. The most popular characters are Inkling and Decidueye. And now we are getting new IPs like ARMs and whatever else Nintendo shows off. But what guest characters are there? Bomberman maybe? Monster Hunter? There aren't a lot left, and I would argue fans are more touchy judging by how well Cloud and Bayo went over.
I don't want to say end guest forever. Although I personally want that, I understand that fighting games do this a lot. Mortal Kombat has them a lot. Tekken 7 is adding Akuma. Guest are kind of the thing. But the problem is you can't flood the game like they did with Smash 4 (out of the 18 new characters, 4 of them were guests. This is also being generous and including DP and Lucina).
Smash is about to be 20 years old. If I was to advise Sakurai, I'd give him two alternatives. Either A)Cut all the third party characters and just focus on Nintendo or B)Pick one REALLY good character and make them feel special. Nevertheless, the point is there needs to be a limiting on guests. Smash is a Nintendo All Star game, and it has to focus on that. Some would argue "Well, there are still a lot of Nintendo characters," but this is expected when every box advertises "Fight with Nintendo's all stars." With the next Smash Bros, there needs to be a focus on Nintendo.
This is something I've been pondering, so I thought I'd bring it up. Also, I know people hate when I bring it up, so sorry if it feels like I'm butting in. Not sure how active I'll be. Just poking around as the Source Gaming discord is getting boring.