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Question is, would any other developer be able to make a worthy Smash clone, or would it end up like Mario Kart, where only Nintendo has been able to really do it right?

Capcom would be the right choice(Power Stone came close to capturing the magic in Smash Bros), but given that Sony themselves owns few Smash-style characters, I'd imagine putting together something worthwhile would be a rights nightmare(same reason Jump Superstars never made it out of Japan).