First Party software needs to distinguish itself from Third Party software. The purpose of Third Party software is to turn a good profit for the publisher. The purpose of First Party software is to sell hardware. The best profits for a console maker comes from royalties on Third Party software. In order to achieve this, they need to get a large console base, and that comes from compelling First Party software.
That's why ARMS really should not have a sequel. It didn't move hardware. The same team could have made a 2D Mario or Wii Sports Resort sequel. Neither of these games has a huge budget and yet they both move hardware. Or if they want a new successful IP, then they should scrap ARMS and try something completely new. ARMS is not moving hardware and that is why it isn't worth it for them to make a sequel.
I'm aware of all those things, that's not really the core of what I'm saying. My main point is that one can't stick certain expectations on any title, especially small budget ones with niche concepts wrapped in new IP's, just because a certain studio made it and this studio happens to have made a lot of really successful games in the past.
Don't know if you quoted the wrong person or concluded that I had an opinion I don't, I actually agree 100% that ARMS shouldn't be a priority for a sequel. Using the publishers and studios I did as examples was simply to use large, well-known studios with many bestsellers under their collective belt as an illustration of scaling ones expectations based on the project itself and not only on who developed it and their performance in widely different efforts.