Pretty sure arms only doing about 3m nixed the chances of many future endeavours like it, solely from a EPD team, unfortunately. The nearest selling game from a EPD team that wasn't one of EPD4s weird cheap Minigames (i.e. 1-2 switch, labo, game builder garage) was mario maker 2, at about 3 times the sales. Doesn't mean they can't have EPD lead an idea and then have a partner do most of the legwork. They've pretty solidly shifted to fully partnering up even on several series that prior have been entirely epd productions like pikmin. There's a premium on EPD time, for better or worse.
Incidentally, and my personal hope if they want to have that game followed up on, I bet next level games would do a great ARMS 2. That's something that would be right up their alleyway, highly expressive characters relying on quality animation, but in a way that doesn't require a excessively large world or number of assets outside of the characters