In my opinion, this game in concept reminds me most of something like Divekick. While you may look at Divekick and say "it's so simple, it has no depth", it was accepted by the fighting game community for a reason. With more simple fighters like this, mind games and reading your opponent become extremely important. That is where a lot of the skill comes into play. Because of that, if you do play predictably, you will get read and punished. I think that is where the majority of the "competitive" level of Arms will come from. Of course there are also additional tactics like some simple combos, heavy reliance on movement (not unlike Smash) and zoning to give this game more meat in actually playing it.
Then on the other side, there is the more casual, party-mode side of the game. As far as fighters go, I would argue that this game is probably second to only Smash when it comes to its potential appeal outside of people who love fighting games (of course its actual appeal depends heavily on marketing). It is fairly simple to pick up and play, you don't need to memorize 20 command long combos with pretzel motions and frame perfect inputs and you don't feel like you are playing the game wrong if you aren't at expert level. Then there are the modes which are simple but look very fun. You have something like Tekken-ball which is pretty much universally loved, team games which are great for bigger parties (again, bringing in that "Smash" appeal), Hoops which is a simple twist on the formula which I think gets a lot from its highly satisfying animations as well as a few other modes.
Basically, I think that Arms has a lot to love on both the competitive and casual side of fighting games. That isn't to say it will be as big of a success as Splatoon - at the end of the day, fighting games will almost always have a smaller market than shooters - but I find it hard to believe that it will be considered a failure either commercially or critically.