Mr. Game and Watch is rendered in 3D
One source says, "Mr. Game & Watch is one of the more unique characters in that he is the only two-dimensional fighter in the games. You'd think such a simply designed character would be the easiest to render, but the folks at Hal Laboratory went the extra mile and rendered him in a special way.
See, while Mr. Game & Watch may look 2D, he is actually a fully realised three-dimensional model. He is designed in such a way so that, no matter what angle you look at him from, he looks like a flat sprite. This feat is accomplished through the combination of his simplistic and distinct art design, and camera perspective alone - a trick similar to 2014's Guilty Gear Xrd. It's classic visual manipulation, and makes Mr. Game & Watch all the more unusual"(Jacobs).