The Pokemon Company is investigating Palworld
Briefly

We have not granted any permission for the use of Pokémon intellectual property or assets in that game. We intend to investigate and take appropriate measures to address any acts that infringe on intellectual property rights related to the Pokémon.
The game has been in development for three years, but this is the first time anybody has had unfettered access to the in-game models which are the source of the controversy.
Read at WGB
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