Super Smash Bros. is one of my favorite game franchises EVER and since I've never owned a Wii, I've only actually put real time into playing the first two games. Nintendo hit a huge home run when they decided to pit their best characters against each other.
Sony has followed in Nintendo's footsteps with the release of PlayStation All-Atars Battle Royale. The game definitely is not a carbon-copy of Super Smash Bros., but clearly was inspired by it. Why has Microsoft failed to produce a similar franchise?
When this question is brought up (which is rare), people tend to point out that Microsoft does not have as many exclusive characters as its Japanese competitors. These people fail to recognize the fact that that does not really matter. Super Smash Bros. Brawl features Solid Snake from the Metal Gear Solid franchise. These games have been on Nintendo consoles, but are actually better known for being featured on the various PlayStations. Also, while no characters from Assassin's Creed are actually in PlayStation All-Stars, some have hoped that Connor from ACIII would make it into the game at some point.
Microsoft, I beg of you, make this happen. Your version can have a significantly different feel than the other two franchises. It will sell, I guarantee it (as long as you DO NOT make it a Kinect game).