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Neither really a success or failure. For a console maker, the type of software that they'd want to make is something that will really move hardware. The best money for the big 3 is in licensing fees, which means they want to make first party games that will move the hardware. Arms didn't really do that.

On the other hand it does round out their library some more and it's a reasonably enjoyable game, so its not really a failure either. Plus I think it's good for Nintendo to keep trying out new games. The more they can do that the better. They aren't going to knock it out of the park every time they make a new game, but it's good that they keep trying.