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Of course it's not !
Take it from a business perspective first, the game performed 2M sales which quite good for most new IP out there and when you add in the tendancy of Nintendo to be budget-conscious about most of their outings, it is clear ARMS was at least succesful in that sense.

Now, nobody knows what Nintendo was actually expecting it to perform but Nintendo never had the lofty expectations of their western counterparts (Unless your Square Enix lol) so I think they forecasted something much in the realm of possibilities for this franchise which it probably reached.
At least enough to make a sequel now 😃

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