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When it comes to Nintendo having a hell of a lot more leeway to pick and choose a black character from their own catalogue of IPs and just not picking a single one, that's what I can get disappointed over. When you have 2 slots in a game like Smash, obviously Sonic is a 100% lock, and when it came to Bayo's popularity at the time, surely it makes sense to pick the lead character as opposed to Rodin, the supporting character/shopkeeper/super boss. Dudley and Elena have been two of my mains in SF since they were introduced I absolutely love their characters and love playing as them, and them missing games always bums me out, but when Nintendo and Capcom are in talks for including a character, obviously Mega Man takes priority, and in terms of SF as a franchise, it's obviously Ryu first, and as much as that might suck, it's not really fair to blame any side for inclusions like that. This applies to all of them, too: it just doesn't really make any sense from a business perspective to not choose the most popular characters, either overall or at the time.
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That being said, I don't really see any situation where Namco would pick him as one of their choices, when they have Pac-Man, Tekken (which is honestly big enough to warrant multiple picks), Lloyd from ToS who has been a fan request since Brawl opened these 3rd party floodgates, and then the actual big Soulcalibur picks (so Nightmare, Sieg, Mitsu, Sophitia, Ivy normally but probably not for Smash lol), and when you only have a limited number of slots, it makes sense to bring your biggest characters. For example, I know he's a villain (unless the new game changes this), but Zasalamel from Soulcalibur would be a dream pick black character for me, and he was always fairly popular, especially as he featured on the box art. However, going back to the discussion at hand, I just can't blame companies for wanting to push their major characters from their major franchises, even if this unfortunately means a lack of representation, especially when these 3rd parties only have a limited number of slots available. I don't really think you can dismiss Terry because his franchise is dead though, when he's been appearing in games almost nonstop for around 30 years, while up until SamSho 2019, her last major appearance was in KoF XIV, which obviously included Terry, and before that it was SamSho Sen in 2008. Click to shrink.Nakoruru is certainly a unique case, as she's hugely popular and I'd say the face of a separate IP, SamSho, than Terry with FF/KoF, and imo she's certainly the most logical SNK rep to follow him in a potential sequel.