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The market just isn't big on waggle games any more, and even though ARMS valiantly is more than that, on first impression looking at it it looks like something from the Wii era and that's just "been there, done that" to too many people. And that's primarily how it was marketed as.

It's sales have slowed to a crawl in Japan and it's fallen off the Nintendo eShop charts pretty hard, so I don't think it'll have the greatest "legs".

That said a shipment of 1+ million probably gives the dev team some wiggle room for an "ARMS 2" at some point.