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Jumpin said:

I can't speak to what Nintendo's business goals were for the game, but I would glean that they likely had to do with establishing a major competitive gaming franchise, which ARMs failed to do. Nintendo often touts the successes of their new franchises and how they fit in with their business goals when they are successful.

Which they did with ARMS. It's primary purpose was to demonstrate the capabilities of the Switch's Joy-Con with a unique take on the fighting game genre, and it did that rather well. Maybe the competitive aspect didn't have the longevity they wanted, but that should serve as an area to improve on with the sequel, not a reason to dismiss the entire game as a failure.