I'd make a ported version a pre-installed game on every PS4. Then for every game you buy, a character and a stage from that game is added to your roster. Trying to making it a Sony Smash Bros is a mistake, this way they could try and beat it through sheer content.

While you may have played it, I doubt it from your statement.  It may look similar in style to Smash, but it plays nothing like Smash.  Even if you were to remove the supers in order to kill enemies, it'd still play nothing like Smash.  The combat itself is entirely different. 

outsource the project to Nintendo?

kidding aside, Sony doesn't have the roster to make a smash game. They need to think more in terms of Mortal Kombat, Teken type fighter not smash.

Like you said.

40 characters with Cloud Strife, Sephiroth, Crash Bandicoot, Joel, Delsin, Echo, Kazuya, Vergil, Noctis, Squall in it.

And 40 levels

Link is one of the worst charactrs in Brawl ( hes in the tier with zelda and Ganandorf... which are awful characters )he is rarly ever used. Do you mean toon link becuase he is used pretty often.

Anyway to answer the OP: I agree, I really liked PSASBR. I think a lot of people dismissed it, without even giving it a shot, but I do think it was lacking some key charcters. Like characters that would get people really excited, like Crash, Spyro, Cloud etc. Also I think a proper story mode like Brawl had would have really helped. The single player they have is pretty boring... And finally they need to balance some characters its annoying how over powerd some chracters were... like Kratos! It got really annoying playing online and  always have to face an annoying, spamming Kratos. 

I wish this game did well enough to make a sequel becuase i feel that they could have realy improved on it and made PSASBR 2 a great game but it seems like Sony isnt willing to take that chance.

Make it more like Smash Bros and a little less like PSABR. The game modes and the horrible balance really faulted the game. Smash bros and knocking people off was great. Using a special with every character in PSABR wasnt that great.

You read my mind. I would definitely have prefered more 3D enviro battles rather than Smash style. It turned out fairly good if you ask me. Maybe there is still time to take it there......IF it ever gets a sequel.

I should of said the community thinks its a smash rip off (which in many ways it is) and thats wat turned this game down. Sales are good dont get me wrong but it did many things wrong. 

No unlockable characters unless you pay for them is a huge slap to the face, my friiend is a huge FF fan and thats where i played the game at (i only played 6 matches) and he was beyond pissed that no FF made the roster, even Sora! He was pissed that you had to pay for characters! I mean seriously, sony aint bad like other huge third party company in terms of dlc+$$$ but they could of added the 6 DLC characters as unlockables. They hold back for more $$$ is a huge slap to the face

it was a Rip off, But even if you like it many others criticised it for it. Thats one reason it didn't sell so well imo

Unless you're not playing the most recent patch, Kratos is no longer overpowered.  He's a good character still, but he's not even top tier anymore.  I haven't played for over half a year, but he was mid tier before I quit playing.