A few points.

1) Labo wasn't revealed "outside" of a Direct, it got its own Direct-like presentation. Which games get their own Directs, the big ones or the small ones? 

2) I gave you multiple examples of Nintendo's marketing push for the game but you continue to say it was "minimal". Nintendo sent out Labo review kits to outlets that normally don't review games, which means they even developed a specific marketing strategy for the title. That's more effort than marketing it in the usual ways and most gaming websites did review the product and had review copies of it. Sure, some of them probably decided they didn't want to review a "non game" but that doesn't mean Nintendo's marketing push was minimal.

3) Reggie said it met their expectations because what was he going to say? "Damn, Labo flopped so hard and people were fired in disgrace over this"? :p And sales going up during the holiday season is normal for Nintendo titles. It happened to basically every other noteworthy Nintendo game as well in Japan. But while other games saw really strong sales increases, Labo didn't even chart in the top 20 last week. Even Mario Tennis charted and that was released in June (way before the latest Labo kits) and didn't exactly have stellar reviews.

4) The Vehicle kit had a low shipment because retailers didn't order more. Nintendo doesn't decide how many copies of a game they ship to stores! The retailers decide this. Strangely, I have seen this argument brought up since the dawn of VGChartz but it's not valid. A low shipment only shows the retailers didn't anticipate demand, it says nothing about Nintendo's sales expectations for the game. Nintendo can only influence retailers by saying "we will push this hard! It will be big!" ...which is what happened with the original Labo kits and which is why it took ages for those to sell out if I remember correctly. 

Theyre seen as failures because we all know what Nintendo can do. Instead of games like Arms, 1 2 Switch and Labo, we could have gotten another timeless classic like BOTW or Mario Odyssey. Instead we got some half assed fillers for the Switch. Shame.

1.) That wasn't a Direct. That was just a 3 minnute trailer shadow dropped on YouTube. Even then, Nintendo didn't mention it in any Nintendo Direct, or at E3. Hell, the Vehicle Kit was revealed AFTER E3.

2.) The fact that Nintendo didn't send review copies to gaming sites at all, and instead to general tech outlets is the point here. They weren't marketing this like a traditional game, so a more unconventional approach was needed. As for everything else, Yes I do believe that marketing was pretty modest in North America. Even when Labo launched, Ads for it only appeared occasionally, not too frequent, not too sparse, and they didn't start advertising it until the day it came out. Nintendo really didn't build a lot of pre-release hype for Labo. We had a hands-on event and some info trailers. That's about it. Stark contrast to something like Smash Ultimate, or Pokemon which had multiple hands-on events, Nintendo Direct appearances, tons of trailers, and large amounts of marketing hype before release. Even ARMS had more pre-release hype from Nintendo. 

3.) Not everything Reggie says is PR, and his position means obviously has access to Nintendo's sales data and projections if he's saying something like that, he also talked about Smash Ultimate being the biggest launch in series history before official numbers came out, which it was. Also, the Vehicle Kit did return to the Top 20 for 2 weeks during the holidays. Sure it's out of it now, but sales grew just like Nintendo said. In the latest IR meeting, Furukawa didn't talk about Labo as a holiday system seller like Smash Ultimate or Pokemon, he simply said sales will grow in its first Holiday season, which they did. It's hard to say if sales grew enough for Nintendo, but you can't really say they were lying. 

4) Okay, but Nintendo and the retailers still need to come to an agreement to decide shipments. These decisions aren't made in a vacuum. In the case of the Variety Kit, what I think happened was that retailers wanted to make sure there was enough for GW in Japan, and Nintendo wanted a number that could sell steadily throughout most of the year. They probably realized that was a bit too much, and decided to do lower numbers for the Vehicle Kit, because it was this close to the holiday season, and smaller shipments work better for a product like it. Even though Labo sales haven't been at a brisk pace, they've been steady enough for retailers to not put on clearance so quickly. In fact, retailers in Japan just ordered more shipments for the Variety and Vehicle Kits last week, so it's gotta be doing well enough for them to keep ordering more. The only ways we know if something is a clear bomb, is if it gets price slashed on clearance ASAP as we've seen happen to the PlayStation Classic, or if the company comes out and says it. I haven't seen any signs of this for Labo, save for maybe the Robot Kit which was always the least popular. 

I liked the concept of ARMS, but it had some major flaws.

1. The punching was backwards. Essentially if you throw a hook the punch goes straight, and if you throw a straight your in-game fist goes way off to the side. There was no option to fix this. It’s like when a game gives you “airplane controls” but no actual regular/logical controls.

2. Missed opportunity for a robust Wii Fit style training camp mode - not just a few training levels, but organized circuits with daily tracking and such, stuff that gets the player moving around, weaving and punching and such.

3. A more robust single player league mode, something like a pro-wrestling game. The single player mode was almost 16-but era fighting game simple.

There’s a lot of room for improvement for an ARMS sequel.

Exactly this point. Failure is relative to the standard Nintendo sets.

1,2 Switch was a failure. Had it not been a launch title, it would not have sold like it did.

ARMs was not a failure. It sold well and I feel like an ARMs 2 would be given a fair shot as the first game was supported well enough and to this day still has many active players. Those who say this game is a failure are probably just Switch haters playing on how niche the game looks or the game just is not for them and they are under the delusion that everyone must have the same opinion as them. It is not for everyone, but it is a solid game, unique, and has done well for itself.

Labo was KIND of a failure. It was a success in the sense that it did, and is doing, well enough to draw a profit. It is a failure because this was obviously meant to be a lightning in a bottle blue ocean product. In that sense, it failed to live up to expectations.

Only, Nintendo rarely has huge expectations for most of their titles. A big reason why many of their games and systems have stock shortages early on, they simply didn't expect them to catch on that fast. Sure, it makes sense for a series like Mario or Zelda to have high expectations, but with a new property, you never know what you'll get, so it's best to temper them so that you'll be surprised if they do catch on so fast. 

I gave you concrete examples of Labo's marketing push but you still continue to dismiss it because you personally didn't see too many TV commercials and it wasn't as heavily advertised as Pokémon and Smash, two established 10m+ selling franchises. In case you missed it, Labo was also advertised by Jimmy Fallon and Ariana Grande. I mean, what exactly constitutes a big marketing push to you? Should Nintendo have persuaded Trump to build that wall to Mexico with a Labo Construction Kit? 

Pre-release hype has never been part of Nintendo's marketing strategy for mass market games since the Wii and DS days (because casual gamers can't be hyped up for games pre-launch and they don't watch e3, which is why it wasn't there) and the fact that they pushed Labo to more and broader review outlets than usual and gave it hands-on events before (!) release in the US and Europe somehow signifies low expectations by Nintendo to you. You then take a PR statement by Reggie for fact but dismiss the Japanese charts and literally just took a game that sold 11k units during launch week in Japan as proof that Labo is a success. And the Nintendo president glossing over Labo and not calling it a system seller somehow also proves that point according to you.

Also, your fourth point is pure spin in which you try to make it look like Nintendo still somehow decides the shipment numbers - they don't. Retailers decide. And retailers certainly did not want the initial Labo shipment to last throughout the year. You also, in your very reply, admit that the Vehicle Kit and the Robot Kit both have low market appeal and the Robot Kit is still struggling with its first shipment. So we have one in three kits being moderately successful after, yes, a big marketing push and yet even the most popular kit couldn't make it into the Japanese charts, despite the charts being dominated by months or even year-old Switch games.

You then move the goalposts to "the game wasn't on clearance" which is a completely different point. Even so, a quick Google search shows that the Multiset Kit can be bought on Amazon Germany for 49.99 and 41.60 on another website which is around half the price it released for I think. I can't speak Japanese but the Japanese Amazon website also indicates price drops for most of the kits. Of course, some of this is because of holiday sales but I can't jump forward in time to late January unfortunately. But again, this is you moving the goalposts because by now "the only way we know" if something is a bomb according to you is if the price gets slashed "ASAP" which means Labo would only be a flop if retailers had given the game massive clearance sales right after launch even though we all know Nintendo's strategy is to keep the prices of their games as high as possible for as long as possible and we even had a thread about this just a few days ago.

So you're saying Nintendo could've made a better game but chose not to?

I think Nintendo is experimenting on some titles to see whether the Wii crowd is going to hop in or not.
Fortunately for traditional Nintendo fans, core titles performed exceedingly well in comparison to wii like games. I certainly hope those sales numbers will discourage Nintendo from trying to go chasing soccer mom crowd.