ARPG aka Action Role Playing Game.
tl;dr - Diablo or Dark Souls?
Both Diablo-likes and Souls-likes are called Action RPGs. In one, you create a "build" using gear and skills, and generally grind for hours on end looking for the perfect drop to make your build a teeny bit better. In the other, your success is based off of twitch reflexes and learning move-sets of the enemies. Gear and loot is pretty downplayed and the enjoyment comes from the elusive "git gud".
I'm not here to argue that one or the other isn't an ARPG. I'm just curious why a new designation hasn't sprouted up for one or the other to make things less confusing. It's getting even worse now that Diablo-like games aren't limited to isometric POV (they haven't been for a while but...) and now people are making souls-iike games in isometric POV. It's only natural that this would happen. But again, why is there still the confusing naming convention?
IMHO, worthless though it is, I don't get why Diablo-likes are called ARPG's. They have lots of A and no RP. (They are Gs tho.) Souls-like feel a lot more like what I would consider an ARPG. But again, my opinion is completely worthless so it's pointless to even attempt to argue about it.
My point is we should riot with pitchforks and torches at the headquarters of... the people who name genres of games... and demand they split ARPG from ARPG so we all know what we're getting into.
Like, someone went ahead and invented "bullet heaven" as a genre name since "bullet hell" didn't quite fit when you were the one with the bullets. I love that! Maybe we can do something similar like call Diablo-likes Action Grinding Games (AGG) or Loot and Build Games (LBG). I'm sure someone can think of something better while we are marching.
I actually didn't encounter anyone saying Dark Souls and like games being an ARPG. Dark Souls like games are usually called Souls like. The problem is, that the term RPG and Action are not a distinct genres. This is a long standing issue in gaming, long before 2000s even. When I was a teenager, some people called Zelda an RPG, others said Action RPG, some people (me included) said its an Action Adventure. Genres and terms that are vague and broad will always clash with others. Don't let me begin what Secret of Mana (SNES) actually is.
Look at Racing games. There are Mario Kart and Gran Turismo, two very different kind of racing games and both still are. What about motorcycle racing or classic racing games like Rock'n Roll Racing (someone remember? this is what Blizzard did before they became Blizzard!).
OK, so you see it's a mess of terms. Diablo isn't a new game, it evolved from previous games that were similar and mixed in from other genres. How do you classify such a game in an already existing set of genre terms? It's kind of an Action RPG that existed before, so its natural to put it into such a category. Look at all those RPG games, they are all RPG but still vastly different. BTW I never heard of bullet heaven, but that sounds really funny. It sounds like an anti name for jokes. And being the one with the bullets might even fit into the category funny and fitting name.
If have a new name for Diable like games, it will clash with other genres again. You put generic terms like Loot or Build into it and so on. What if a Diablo like game isn't that grindy? Or does not focus much on Loot. We have been through this with various other genres. Therefore I would not even try to invent something and not take genres too seriously. It's a mess. You can't getting it right by adding more mess to it.
If Zelda is an RPG then so is Halo. Master Chief and Link both have exactly the same number of thoughts in their heads. I would argue Halo ODST is more of an RPG than any Zelda game.
Zelda 2 is more of an RPG than ODST, but the thrust of your argument is true.