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The_Liquid_Laser said:

It has more to do with the question, "Why do people play this game?"  People play ARMS mostly for competitive fighting.  That is also the same reason they play Smash Bros.  It's kind of redundant to make another ARMS, because fighting fans just want to play Smash Bros anyway.  Nintendo would be better off making a unique type of game than making another ARMS.  ARMS doesn't really bring in new people to buy a console.

But ARMS is still a completely different game from Smash. Them both being fighting games, doesn't change that. The fact that it sold 2 million copies worldwide is enough for them to make a sequel. Even creator, Kosuke Yabuki would like to make one.