>>46453884apparently now it's more collaborative with the game design team than ever before, so yes now they are designing mons with specific aspects or locations of the game in mind, for example (i'm just assuming) "we need a mon that would make sense for this gym battle" or "this rival's team" or just "this environment in the game". in the old old days they were just created as sprites first by the artists, and then expanded upon by Sugimori as official art, which then in turn influenced how they were depicted in future games. this was the case until Gen 4, when all mons were designed on paper first.
apparently there is a team of executives that has final say, and there are plenty of rejected designs. from Gen 5, they said there were 18 mons that didn't end up making the cut. now it seems to be much more lenient, with stuff like Eiscue getting through, but idk. i'm also suspicious that certain mons are being designed with 3D modeling in mind first, for example Eiscue or Obstagoon, but then there are some mons which seem like they could only ever "work" on paper, like Inteleon, so i'm not too sure. maybe they're all still designed on paper first.