Assuming that this would be the absolute first Smash ever and we were getting only 12 characters, I think it'd look something like this.
Mario is a duh. So is Link, Pikachu and Samus. That's pretty much Nintendo 101. Some would argue that Donkey Kong is a bit less relevant, but I think a lot of people underestimate just how damn iconic the character actually is. Aside from Pac-Man, Donkey Kong is likely the most famous arcade game of all time, and so is the character by extension. There's more people around the world who know who Donkey Kong is than the likes of Link, Samus, or Kirby. Which is why I think leaving him out of a compilation of Nintendo characters would be a HUGE mistake.
Kirby stays for the sole fact that he's been an incredibly consistent franchise on Nintendo consoles from day one. He's arguably not one of Nintendo's biggest series, but there's always new Kirby games on the horizon and they're always successful.
I chose to keep Luigi because he's basically the #1 Player 2. He's always been a part of Mario. Plus, by using Mario as a base, his inclusion is always simple from a developer standpoint. He'd be the only clone in this roster.
Star Fox is likely the series I'm the least convinced of. While Star Fox was a huge name in the 90s, the series hasn't seen a lot of success as of late, and Smash Bros. itself is arguably one of the biggest reasons the series is still relevant in the first place. Ultimately I chose to include Fox because even though it's not the most consistent series, he
was still a
huge success two decades ago. Games are infrequent, but very likely not over. The sole fact that it's one of Shigeru Miyamoto's series already gives him a huge advantage to be honest.
Marth could ultimately be replaced by a different Fire Emblem character. Choosing the first Lord is just as valid as choosing the newest one, but a Fire Emblem character is a no-brainer lately. The popularity of FE is at its peak right now.
There's not a lot that needs to be said about Villager. Animal Crossing is already one of Nintendo's core franchises, though I'd personally rather include a more "defined" character, such as Isabelle, who I think works better as a mascot of sorts.
One of the biggest reasons I chose Olimar is due to the timing of its release. We have DK, Mario, Luigi, Link and Samus representing the 80s. Kirby, Fox, Marth and Pikachu representing the 90s. Villager is technically already there representing the 2000s, but I thought we needed more than just one character.
Speaking of trying to represent each era, there's there Inkling representing modern Nintendo. Splatoon was a huge success, and has a super creative concept that fits right in with Nintendo's classic franchises. Inkling is the perfect choice for Smash Bros. if we want just a single modern character. I also thought about cutting Luigi and replacing him with a Xenoblade character to give modern Nintendo an even bigger representation, but ultimately decided against it.
And speaking of Inkling, you may have noticed that icon. I have free time today, and after seeing so many people use a bunch of icons and then just typing "inkling" in between everything else, I decided to create an icon that fits with the rest. It's not perfect, but if you want to use the icon for anything, just go ahead and take it off this post.