>>55535525Nintendo has published games that use UE before (Yoshi's crafted world for example), but yes, they do themselves use exclusively in-house engines. This is very normal in Japan though, Capcom uses their own in-house engines, FromSoft uses their own in-house engine, I usually only see third party game engines used by smaller developers in japan.
>>55535532Nintendo has competent programming staff in-house, Game Freak does not. They're staff simply did not have the experience needed, having developed top-down 2D / 2.5D games for a long time and completely skipping the N64, Gamecube, Wii, etc. eras where developers all learned the tricks of the trade for big 3D games.