God of War 3 sold over 5M.

That's in the second paragraph...

The gameplay in Diablo is a little deeper than your typical hack and slash IMO. It's more an RPG.

The term is used different ways.

Hack and slash is a certain style of dungeons and dragons quest where the game is just about killing stuff with no other point.  Since D&D influenced a lot of earlier rpgs (and a lot of newer ones), games that were influenced by that style were called hack and slash.  Diablo is that sort of gae.

Hack and Slash also became a term used for beat em up games that used edged weapons.  Because beat em up really wouldn't be an appropriate term for something like Golden Axe since you're not really beating anyone up.  You're hacking them and slashing them.

So, they're both hack and slash games, but different kinds of hack and slash games.  Either way though, I don't think being deeper necessarily disqualifies it from being a hack and slash game.  If the vast majority of your game revolves around hacking and/or slashing, I'd say it qualifies.  Hack and slash and RPG aren't mutually exclusive.

Assassin's Creed has weapon based combat but it isn't a hack and slash game. Souls games are RPG's with mele combat as they focus much more on RPG aspects such as levelling up your skill and abilities and managing your exp points.

That's not what hack and slash games center around. Also hack and slash games have a few weapons with varied movesets for each one and in Souls games there are a huge range of weapons but all have the same moves, only differing in speed, strength and stat requirements for the weapon, something that doesn't exist in hack and slashers as when you get a weapon in a hack and slash you can use it from then on in the game.

You can also play through Souls games by just using magic. That's not possible in hack and slash games. God of War has magic but they are limited in nature, more effective but very limited and there is no way to replenish them by using rings and any items.

Diablo 3 is more of an RPG and dungeon crawler, than a beat em up hack and slash.

Both gameplay styles are deep. Hack and slash games have more active depth where you need to understand enemy movements, attacks, best way to attack and counter their attacks, weapon combos for every weapon you use and what combination of weapons suits you best. Its like fighting games, the depth goes above most of the people who play it, as most of them don't play these games on the hardest difficulties where each of these is important to beat the game.

RPG's have passive depth and are more about managing your exp points, items and in real time combat you require minimal reflexes and combat senses.

I'm not sure what Assassin's Creed has to do with this.  I didn't say that it is a hack and slash game, or that any game with weapons based combat is.

You're still just defining hack and slash as the kinds of hack and slash games you like, and ignoring all of the other examples that disprove the point.  You've yet to give a good reason why hack and slash games require a certain selection of weapons, or a varied moveset, or whatever.  If you're only counting games that conform strictly to what the genre was like 15 years ago, and you ignore any game or franchise that has evolved over the last decade and a half, then of course the genre is going to wind up less popular. 

Here's a better criteria for hack and slash games.  Is the vast majority of the game centered around hacking and or slashing enemies?  If so, it's a hack and slash game. 

Souls games aren't centered around hacking and slashing things. THey are centered around earning Souls to buy items, craft weapon upgrades and upgrade player statistics.

You can beat the game by using magic as your primary attacking method, and use hacking and slashing sparingly. Hack and slash games are entirely made around hacking and slashing. The genre has evolved in the last fifteen years, but the core gameplay loop remains the same in modern hack and slash games.

Like I said, I haven't played the souls games, so I can't speak to whether they should be considered hack and slash or not.  I'm just saying that a large or small moveset isn't a relevant factor.

With that being said, you could easily get through the bulk of Devil May Cry 3 without any edged weapons.  It would be hard (but not impossible) to get to Beowulf without actually using your sword, and from then on, you can rely solely on Beowulf/guns/guitar.   Bayonetta games only have a few weapons that actually hack or slash, and you never have to use them.  So, the option to play the game without much hacking and slashing is a pretty weak argument too.

Hack and slashers don't have to use weapons that hack and slash, as in sharp edged weapons, but have weapon based mele combat. Yes you can play through DMC 3 by using Beowulf once you've unlocked it, like you could with iFrit in DMC, Gauntlet of Zeus in GOW COO and Nemean Cestus in GOW 3. Those are still mele weapons that allow you to use combos. Same goes for weapons in Bayonetta.

I was mainly referring to the Diablo series but yea that doesn't happen for all hack and slash.  Hell even with the reptitive clicking I still loved the Diablo series.  Sure it had more depth like magical resistances and knowing what weapons worked better for each enemy but it was a click fest.