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Nintendo is notoriously litigious, particularly around something as valuable as Pokémon. I wouldn't count on this staying around very long.
Yup. Saying "No copyright or trademark infringement is intended in using said source material in Pokémon Generations." is like hitting someone with a baseball bat in the face and then saying "no harm intended".

This is massive, clear-cut, unambiguous copyright and trademark infringement.

More like writing "this won't hurt" on a baseball bat and hitting yourself in the face with it. And expecting not to hurt yourself.
I feel like you have Nintendo confused with Square-Enix. As far as I know, Nintendo is one of the most chill companies out there when it comes to fan works. Heck, someone has almost finished an entire remake of Metroid 2 without so much as a whiff of legal action. (search for "Another Metroid 2 Remake" on your search engine of choice) Not to mention the mario dimensions (or whatever it was) fangame which was a complete hack of Super Mario World to span multiple worlds. (such as the Halo one) Or the Mario fangame which allowed real time editing of levels. (Mario X I think? the dev went on to make Terraria, if I remember correctly)
You're thinking of Super Mario Bros X, and IIRC Redigit did actually get a cease and desist for it.
So aside from being 3D (which seems nice), what's so great about this?
If it contains any of the now-unobtainable Pokemon granted at conventions, I imagine it would make many a twitchy obsessive completionist quite happy.

I don't know if it actually does.

I think what's interesting about it is going to be the legal fallout.

What's going to be interesting about the legal fallout? I've seen the same pattern across all sorts of fanworks. Company lawyers send cease and desist to infringing party, infringing party complies and learn that infringement is infringement whether or not you "intend" it or make money off it. On to the next project.
It's multiplayer. Maybe even-MMO style?
Well that was fun... though it made my MBP (i7) a little too hot to touch on 1024x768 and the "Fast" render setting. It should run much better in Windows but damn. There don't seem to be any mods yet which is understandable given how young the game is, but that would be a huge draw. Even user-created maps would be enough to make Pokemon fans swoon. I hope the developers are making plans for the lawhammer though– this is much harder to sweep under the rug than hacked ROMs.
Given that they are apparently quite skilled at game development, I would hope that they would have considered that when starting. Perhaps the server is hosted in a country out of Nintendo's reach.
Since they didn't mention it they're probably A) definitely screwed or B) very humble developers who do not wish to bait the wrath of Nintendo into whatever remote territory they (or their code) resides. B might be a little optimistic. Can you think of any countries where this would be protected (under some freedom of speech or fair use) for non-commercial interests?

Note: The Pokémon Company alone has headquarters in Japan, the UK, and the US.

If the servers are hosted in any country which is a member of WIPO or otherwise is a signatory to the Berne Convention, then the servers are most definitely within Nintendo's reach.
It is hard to believe Nintendo has neglected a real multiplayer Pokémon game for so long. A MMORPG would be an _obvious_ money maker for a company that so many see to be in trouble.

Even if it was only for their own proprietary consoles..

Funny enough, I've always held Pokémon to be the perfect intersection between a massively multiplayer game and an alternate-reality game. After you've completed the main quest, the endgame is you roaming the in-game world and collecting pokémon, while meeting people in the real world and having your in-game worlds interact by battling each other, trading pokémon and more, in the newer games.

I think an actual Pokémon MMORPG just wouldn't be the same really.

It would be fun as a augmented reality game with smartphones.
There's nothing wrong with 2D and turn-based combat. A multiplayer version of that, is the Pokemon game I've always wanted. I don't want to do no silly skillshots.
I agree, I even like the older games compared to the new 3d ones. Then again I am a sucker for the older generation pokemon up to Ho-Oh.

Gold was my favourite, but Yellow will have a special place.

My lineup was actually Charizard, Blastoise, Venusaur, Mew, Raichu and Ho-Oh.

The newer one don't really have the same feeling, I don't blame the 3d part, it's mostly the addition of characters and pokemons.

http://pokemmo.eu/

Would this be what you're looking for? Basically turns pokemon red into an mmo, even uses ROMs for the content.

PokeMMO is great if you want a multiplayer pokemon.... What I dreamed of as a child
This looks great, I'll look into it.
This website did a full screen pop up ad for MacKeeper including an Alert box when I clicked play on the video.

Additionally this looks good for an amateur project but it hardly looks like a fully realized polished game.

Every time I see "No copyright or trademark infringement is intended." I strain my eyes from rolling them too hard.
I don't understand why talented artists and programmers sink their time in projects that are so likely to get shut down by the IP's rights holders. Why not put all that effort into creating something new that they completely own? Are people so smitten to franchises?

Remember how Square Enix shut down Chrono Resurrection (Chrono Trigger 3D fan remake)? All that work down the drain, and it was such a predictable outcome, too.

Maybe this is a way to get attention. Get your project noticed, get a C&D from a big company and generate even more buzz, then change the game's theme and retain some of the original fan base.

Well I think this underscores the value of intellectual property and trademark, doesn't it? It's not difficult to copy the beloved game mechanics in a role playing game...but what interests gamers is more than just the game, but the emotional attachment they have to characters and storylines.

(no, I'm not justifying these takedowns and I would love a Chrono Trigger remake...just pointing out how much writing/branding contributes to the value of any story-based medium, including video games)

Sure, it's easier to make a game when the characters and story lines were already made for you. I'm not sure I agree with the ethics of it though in the context of independent games. Creating a quality backdrop for a game is hard work, and these people, just like the Chrono Resurrection team, are taking a cheap shortcut. I don't see this as any better than using ripped sprites and ripped sound effects. I'd prefer to see original content get this kind of attention instead.
It's infringement and it's fine that the content owners send out their C&D's. I doubt there is any malice, though. I seems more like they just loved the game and want it to continue in some form than they are trying to get attention.
That is the incentive behind all the remakes, but it doesn't change anything. In life, intent doesn't mean much. It can be a slap in the face sometimes as well. Besides, commercial intent is inevitable when they start to grow.
You are not correct on this one. Intent is greatly meaningful in life and under the law. Commercial intent with a derivative work is not inevitable, nor is their growth inevitable.
I agree that intent can be meaningful in a court of law. But try the intent excuse with a woman or in a business transaction and it might not matter. Sure it could, but it's usually the end result that really matters. Intent translates to something along the lines of, "I tried, but something happened and now you're not getting what you expected" -- sounds like falling short to me. I'd much rather just get exactly what is expected and agreed upon.
At the same time, it's a shame to see good potential material go undeveloped simply because it's in someone's IP warehouse, stagnating. IP protection has societal benefit when it protects innovators who are actively enhancing their works, but when things just sit, it's not particularly socially helpful. It's analogous to the sort of patent troll that sits on a patent for a specific technology that they're not bothering to exploit, but sues everyone who does.

I understand people need to protect their brands, and that it's impossible to know whether a given work might be exploited in the future, how to resolve conflicts if a derivative work offends the original author, or whatever, but I definitely believe that our current IP regime is waaay overprotective in many cases and is having a chilling effect on business, science, and the arts.

This is just asking to get a cease and decease notice from nintendo. I've always wondered why Nintendo don't make a MMORPG version of Pokemon. It would probably be a big hit, a lot of people are probably waiting for it to happen...
I don't understand why projects like this don't use anonymization techniques to protect themselves from C&Ds. Release through torrents, take donations through bitcoin, etc.