Okay, sure it was probably Nintendo's lowest moment, and really their only outright failure for a stand-alone console (we're not including CD-i in this equation, because c'mon, no one counts CD-i in anything). It was the original Oculus Rift, only awful and it forced you to gaze into a nightmare-scape of red and black. But it's still an important figure in Nintendo history and would make for a pretty powerful Smash Bros. character. After all nothing has ever done as much brutal damage to Nintendo as the Virtual Boy.
Captain N was every kid's dream: he was a regular, run-of-the mill cartoon teen who got mysteriously sucked into a world where videogame characters were real. The only problem was (if you can wipe away the nostalgia), the videogame characters were all terrible. Kid Icarus had a bizarre New York accent, Simon Belmont was essentially a proto-Zapp Brannigan, and Mother Brain literally had the same voice as the evil plant from Little Shop of Horrors. It was as if the writer had seen the characters in a manual and made up the rest from there (one example: Mega Man is green in the show, and it's rumored that the reason for this is the animators tried playing Mega Man once on a crappy TV with messed up colors. That was the extent of research done). Still, Captain N was Nintendo's first "original" cartoon show, and the Captain himself was a big part of that. Plus, he had a Power Pad that could stop time and a Nintendo Zapper that actually shot lasers. I don't care how crappy the cartoon was, that was every 80's kid dream (besides not getting blown up in a nuclear war, that is).
Nintendo knew it had a big hit on its hands with Mario a blue collar guy who was running his own series after a successful tenure as an ape-murderer/kidnapper. But since Mario was off to the big leagues, they needed a new hero to fight their totally original giant ape character with the last name "Kong" in Donkey Kong 3. And Nintendo decided upon a character you must all definitely remember: Stanley the Exterminator! Remember him? He wanted to protect his flowers from bugs that Donkey Kong was stirring up? You know, Stanley! No? Still nothing? Well, he was pretty much a shallow attempt to clone Mario, giving him the same outfit and a blue collar job title. Really, the only thing missing was some vaguely-offensive ethnic stereotyping.