Since Sakurai is posting a picture with Geno/ Sephiroth I might as well post my take on the whole situation. These are my opinions.

WARNING: I'm not dunking on Geno nor his fans with this post. I was genuinely rooting for the guy because I know his fans are passionate.
{1/?}
I don't think it was SE that denied Nintendo's request for Geno.

In the end, Sephiroth makes more sense to add over Geno. Partly because of money, partly because it's better for SE/Nintendo's relationship, and because DLC characters need to bring in new customers.

{2/?}
Geno's addition would please a portion of the Smash fan base that has largely already bought the DLC. Adding Geno wouldn't move more Fighter Passes, at least compared to the impact of Sephiroth. It wouldn't bring new people to Smash Ultimate.
{3/?}
Sephiroth also cements Nintendo as a primary console for new and old Final Fantasy content. Sephiroth is introducing a lot of people to FF, and guess what? A ton of FF games are being sold on the eShop. Nintendo and SE both make money off that...{4/?}
Nintendo fans (like myself) are notoriously difficult to introduce to new non-Nintendo series. We like Nintendo games, and that's about it. Having a 3rd party character in Smash is a great, proven way for 3rd parties to get *introduced* to Nintendo fans.
{5/?}
Geno would get people introduced in Mario RPG, which isn't as lucrative long term as FF. It's not a series that Nintendo/SE has really continued and Geno doesn't have a bright future. The character's now more famous for being a Smash request than his own game.
{6/?}
Remember, Nintendo picked the DLC, not Sakurai. Nintendo and SE are looking long term strategy as well. Advertising the strength of their IPs is one of Nintendo's strategy. Tieing FF to Mario adds more value to Smash.
{7/?}
I'm bummed out that Geno didn't get a deluxe costume. A lot of fans are upset he wasn't revealed earlier and I can completely understand that. But it seems that might've been a SE thing as Hero came with DQ content only and Sephiroth came with FF content only. {8/?}
Reveals are complicated, and there's always someone who wants a character. I was bummed when Travis got a Mii Costume as well, and I can understand that feeling of wanting relief earlier than later. But there are only so many announcements per pack, and there's licensing involved
All in all, it's business. If additional FF content wasn't possible I think Geno would've been possible. For a long time, I thought Geno would get in because I thought FF content wasn't possible. Nintendo/SE pulled through a deal. {10/?}
Let's be nice to each other. Dunking on people for wanting a character is childish, toxic behavior.
Sorry for the long rambly thread, I wanted to get my take out there. {11/11}
If any Nintendo or Smash Bros discussion channels want me to come on and talk about this with them just slide into my DMs ;)
RE: What about Banjo and Terry?

Terry brought most of the KoF franchise to Switch. Look how many KoF titles there are on the eShop. He's not irrelevant at all.

Banjo broke the barrier between Microsoft and Nintendo even more. He made huge waves on the Internet...
I think Microsoft and Nintendo's close relationship (which started with publishing Minecraft) has been vastly improved because of Smash. A lot of doors had to be opened for Banjo and Steve, and I'm excited to see what else will happen.
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