If this happens then Sony shouldn't try to be Smash Bros but rather try to find their own 'insanely unique fighter' approach, much of the first one seems to have laid the ground-work by working on being flashy.
Nintendo has ultra-super-hero 'comic-book' esque action for Smash Bros, so I think Sony would do well to have cheesy over-the-top "action movies" action as the goal of Battle Royal.
Then Microsoft will come along with a duck-and-cover first person 3D fighting game with guns. XD