That's why you grow and IP with future games and crossover content. Very few franchises become megahits overnight.
I don't know what you are trying to say here. Good games get popular and become hits. Most publishers do not ignore games that have high sales success.
Two million units to Nintendo is probably dogshit and they didn't warrent any further investment in ARMS.....at least for now. Hell Splatoon got a sequel and splatoon only sold HALF what ARMS sold. Though the Wii U is probably to blame for that, and to be frank SP2 is the same exact game with a few additions.
And think about this. Breath of the Wild is a MASSIVE game, way bigger than 5 ARMS Sequels would be, and yet Breath of the Wild 2 will arrive well before the next ARMS game.
Think of this..... Mass Effect only sold 700k copies. Less than HALF what ARMS sold, and Mass Effect got 4 games out of those sales numbers. Mass effect 2 came out three years after the first one 2007-2010, with the third game coming in 2012.
ARMS has been out over three years, and the only thing that IP has to show for it is a game that's barely played and some Smash DLC.
Nintendo does not stick with anything unless they see instant mega success.
Arms took 18 months to sell that 2million copies. Meanwhile Breath of the Wild sold 18 million copies.To Nintendo, that makes ARMS a waste of time, but more than that, it makes developing new IP a waste of time because they don't NEED to. People are clearly buying more than enough of the existing properties and the characters in Nintendo's stable are so boring and generic that any game they make featuring those characters can literally be any genre of game they want to make. So why bother with a new IP?
Credit where credit is due however. Nintendo has bought new IP's out of Platinum. Since now they own Bayonetta, (not a new IP but they're making a new game in the series), Astral Chain (which is already close to ARMS in terms of sales numbers). And they struck a temporary deal to own Marvel Ultimate Alliance 3 which also is on pace to out sell arms.
Nintendo however isn't developing those IP's though. They might fund them, but those are one time deals and they don't necessarily hold the rights to that IP in it's entirety, as the same deal was struck with Capcom back in the day for a few games developed by Capcom but funded by Nintendo, only to later see those titles on other systems later on. Resident Evil 4 being the key example here.
So does Nintendo develop new IP's in-house? Yes, but they always seem to drop those IP's as soon as they come out. Thus causing people to effectively forget about them, or saying "they don't count".
They do count, they're just shit and nobody cares.