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Louie said:

Labo, well... a lot of people said it would sell amazing (others said it would flop hard) and Nintendo banked on it doing huge numbers: stand-alone direct, press invites to play the game, big marketing push. That wasn't the case. It sold decently but not great. Out of the three titles Labo is the closest to a failure because Nintendo tried to push it so hard and treated it like an AAA game in terms of selling power.

Really? Ever since Labo was revealed, Nintendo hasn't really given it a massive marketing campaign. Even going into the Vehicle Kit, their marketing was modest at best. So I don't think they ever banked on this thing being an instant mega-hit. Rather, every time Nintendo talks about Labo, they talk about it in long term sales. Their plan is to sell it over time, with sales boosts during holidays and new Kit releases. Even Reggie said that it met their sales expectations. 

I think people were really hyping this up to do Wii Fit/Brain Age style mega numbers instantly, but when that inevitably didn't happen, they claimed it was a failure. Labo's a weird product, so are Nintendo's other new Switch IPs. Even if they're multi-million selling titles, they're still failures for not selling like Mario Odysssey or Smash Ultimate, even though games like those are freak anomalies.