The only fighting games that have sold more than it this gen are Tekken and Smash Ultimate so it's far from a failure.
Besides Tekken and Smash, there's actually a bunch of fighting games that have sold more as well. That still doesn't make ARMS a failure though.
Best selling fighting games in the 8th generation (excluding WWE 2K and EA Sports UFC):
1. Super Smash Bros. Ultimate: 20 million (link)
2. Mortal Kombat X: 11 million (link)
3. Mortal Kombat 11: 8 million (link)
4. Tekken 7: 6 million (link)
5. Dragon Ball: Xenoverse 2: 6 million (link)
6. Naruto Shippuden: Ultimate Ninja Storm 4: 5.8 million (link)
7. Dragon Ball: Xenoverse: 5 million (link)
8. Dragon Ball: FighterZ: 5 million (link)
9. Street Fighter V: 4.7 million (link)
10. ARMS: 2.1 million (link)
No new sales updates on Injustice 2 (1.5 million in 3 months).
Edit: Updated the list with just released number for Mortal Kombat 11.
After 8 million (and kounting) MK11 games sold we're not done yet. Stay tuned to see what's next for MK11 this week!#KombatKontinues— Ed Boon (@noobde) October 5, 2020
That would be Machina and me
Thanks. Would you be able to use some of these sources in order to update VGC numbers?
Edit: I'll try again :)