In gaming, a tier list is a list that ranks all characters in order of their potential to win under tournament conditions, assuming equal skill on the part of each player. A tier list is decided based on the analysis of the following; the metagame and the effectiveness of the characters' strategies, each character's moveset and statistics, each character's matchup spread, and each character's tournament results. Tier lists are commonly made for fighting games that are played on the high competitive level, such as Mortal Kombat 9. Some games that aren't fighting games, but have large character sets, such as the Pokémon series, can also have their own tier lists.
The metagame of each game in the Super Smash Bros. series encompasses all the currently known techniques and strategies that have proven useful during tournament matches, thus, the tier list for each game ranks and measures the expected competitive performance of every character, based upon analysis of these techniques and strategies. The most widely accepted tier lists in the English-speaking community are those produced by the Smash Back Room.
Individual matchups affect, but do not ultimately determine, characters' tier list rankings. Often, a particular character will carry a supposed advantage over another character — such a matchup is known as a counter. However, some characters have an advantage over a character that is higher on the tier list. For example, in Super Smash Bros. Brawl, Peach holds an advantageous matchup against the Ice Climbers, but suffers from matchups poorer than the Ice Climbers' against nearly every other character in Brawl. While she can be considered a counter to the Ice Climbers, Peach is still ranked lower than the Ice Climbers on the tier list (due to poorer overall matchups, among other reasons). Thus, if two players at the top of the known metagame played a match with Peach and the Ice Climbers, the tier list alone could not predict the outcome of the match. Furthermore, tier lists do not rank characters relative to the numerical average of their matchup scores.
Super Smash Bros. tier list
The following is the Super Smash Bros. tier list produced by the 64 Back Room. The numbers below the characters was their average ranking during the voting for the tier list. It is current as of September 20, 2011. 
Super Smash Bros. Melee tier list
Super Smash Bros. Brawl tier list
Controversy over the existence of tiers
It is a common misconception among new players, and even a few experienced players, that all the characters in the series are equal. It is thought amongst them that the strengths and weaknesses of characters balance them out. However, the consensus of competitive players, and knowledgeable but non-competitive players, is that tiers do exist. They argue that it would be almost impossible for developers to balance a game of unlike characters, because the differing properties of each character produce a huge number of variables that cannot successfully be monitored and modified for the purpose of perfect balance. Thus, developers cannot foresee top level strategies, and even deliberate efforts will not perfectly balance a game at a professional level. Furthermore, the developers did not intend for games in the Smash series to be played competitively, and the conditions under which they are played in tournaments are different to those under which they expect the game to be played. Years of empirical results also support the existence of tiers: national tournament winners of Melee most commonly use Jigglypuff, Fox, Falco, and/or Sheik; and winners of Brawl nationals most commonly use Meta Knight, Ice Climbers, Olimar, Snake, Diddy Kong, and/or Falco. Additionally, the top 25 players on the SSBPD for Melee were composed almost entirely of players who mained top or high tiered characters; the sole two exceptions were Shroomed, who used Dr. Mario (then considered a middle tier character,) and Axe, who used Pikachu (then considered a low-mid tier character,) but even these two players have top tiered secondaries, with the former using Sheik and Marth and the latter using Fox and Falco. In response to the fact that the tier list changes, pro-tiers state that the anti-tiers' argument does not weigh against the existence of tiers, because the tier list must change as the metagame changes and new things previously unknown are discovered.
Controversy periodically arises over the existence of tiers, most notably during the "tier wars" on GameFAQs and SmashBoards. Some smashers, called "anti-tiers", argue that every character can be played equally well and that therefore, tier lists do not exist. In support of this argument, they claim that the presentation of a tier list creates a cycle in which players see the list, and choose only higher-tiered characters to compete with, which causes only those characters develop an advanced metagame, thereby reinforcing the high-tiered characters' positions on the tier list. They also argue that the tier list cannot be true because it continuously changes. The problem with the former argument, is that while higher tiered characters do see more usage, even the worst ranked characters have professionals dedicated to using them, such as Gimpyfish and Vermanubis, who put in as much effort and time, if not more, as the players of higher tiered characters. As such, these characters still see their metagame develop, and continually have advanced techniques of theirs and the like discovered. Despite this, the playerbase of lower tiered characters still routinely performs worse in tournaments than the playerbase of higher tiered characters, with even the best player of a lower tiered character very rarely ever placing high enough to win money in regional/national tournaments. Additionally, there have been many cases of a player dropping their main character for a higher tier character, and then performing even better in tournaments (such as Vinnie, who became one of the best players in the United States when he started using the Ice Climbers instead of Mr. Game & Watch). The problem with the latter argument, is that while an individual tier list may not stay accurate forever, as explained in the previous paragraph, it does not discredit the existence of tiers.