The Blue Arrow is an item featured in The Shadow Prince. As mentioned in the book, Link usually uses this arrow during indoor archery matches.
When Link is at the indoor archery match against Charles of Moria, he will have a choice of picking between using the Red Darknut Arrow, Impa's Green Arrow, or his usual Blue Arrow. If Link chooses the Blue Arrow so as to not resort to the magic that exists within the Green Arrow or the Darknut Arrow, it will land mere inches from the bullseye, which will make Charles the winner while the young hero gets second place.[1]
However, considering that the Red Darknut Arrow ends up killing Link and that the Green Arrow's magic is thrown off due to Charles's Necklace, choosing the Blue Arrow is the best path out of the two other options, since it will also give the reader 100 points for coming in second place.
It's possible this item was meant to be the Silver Arrow, whose sprite in the original game was primarily shades of blue.
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References
- ↑ 1.0 1.1 "Link's arrow is a hair to the left of the bullseye! [...] 'Charles is the winner,' calls the king. 'In second place: Link.'" (The Shadow Prince, Simon & Schuster, pg. 73)