Aren't they already starting to promote in the west now? DQXI had a significant presence in the last direct and there seems to be more effort put into the Western version, given that we're actually getting a symphonic soundtrack. It seems to me that they are starting increase their promotion in the west. So I personally think they'd see the marketing potential for Erdrick being a DLC fighter. Also Hori has said he wants the series to get more popular in the west.
If that was the case, why does cloud
barely crossover with any non-Square Enix games? I think the ones besides smash are Little Big Planet as a skin, and a mobile game called Monster Strike. He's a globally popular character, no? In addition, you've also got
this interview. This indicates that they were okay with letting Sakurai use a newer character. If they were worried about characters not being globally popular, why would they be okay with a newer character? Wouldn't they feel that it's a risk. Plus, the fact that Sakurai was able to get the rights to Cloud twice, one of which a base game character, speaks a lot to the sway that he/Nintendo have in negotiations with Square.
And I would disagree that putting Erdrick as DLC is a risk unless Smash DLC doesn't sell as well as we think. They would still profit from it as DQ is really popular to where Erdrick or a DQ character would sell well overall. It isn't as big in the west but the curious and the completionists would still buy him. Namasura has already posted sales figures, but DQ is one of SE's best selling and most popular franchises despite the majority of the sales coming from on region.
The Geno costume also comes to mind. Square knows he's obscure, yet allowed his presence in the game. Why didn't they get a costume of a more popular character? That'd sell more, no?
If you ask me, this whole "Square Enix is too stingy to give more characters" is the next "Konami is too evil to give us characters". Just somewhat blown out of proportion. Are they protective about what they lend out? Absolutely. There's a reason why Cloud doesn't crossover as much despite being one of the most iconic gaming characters. There's a reason why FF content is lacking. But at the end of the day, Nintendo got Cloud in the game. And I believe they are capable of securing Erdrick too if they really wanted it, especially when there is a major marketing benefit for Square Enix.