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A single player FPS? I don't think it would have enough of a compelling campaign to be worthwhile or unique. I mean the Goldeneye mod seems decent/funny, but I don't think Nintendo wants Mario to have dialogue.

With Multiplayer FPS, there are several Mario characters so the selection is endless. However, the design of Mario characters seems too quirky to work in a competitive environment, so playing stealthily wouldn't seem like a viable option (and if there are two Peach players, what would that look like? Different colors?). So a tactical/slow FPS just wouldn't work. As for something along the lines of Overwatch as a team-based shooter, Mario characters aren't fleshed out enough to assign roles or distinctive weapon types.