Paper Mario: The Origami King's producer says the series can "no longer modify/create characters" tied to the Mario universe

Many Paper Mario fans have been wondering why Nintendo has stopped creating new takes on Mario characters within the Paper Mario series. Games since Sticker Star have used either generic Mario characters, or created new characters that are completely separate from the Mario universe. Previous Paper Mario games would take classic Mario enemy/character types and give them unique personalities and looks. Believe it or not, we finally have an answer as to why this has stopped.

In an interview with VGC, Nintendo's Kensuke Tanabe offers up this explanation.

Since Paper Mario: Sticker Star, it’s no longer possible to modify Mario characters or to create original characters that touch on the Mario universe. That means that if we aren’t using Mario characters for bosses, we need to create original characters with designs that don’t involve the Mario universe at all, like we’ve done with Olly and the stationery bosses.

Whether a character becomes an all-time hit or not isn’t up to us on the development side; I think it’s more the case that characters that fans truly accept naturally end up that way. I hope that the origami siblings in Paper Mario: The Origami King will stay in players’ memories, even if they do only end up appearing in this title.

In other words, any Mario characters that appear have to stay as their generic designs, while brand-new characters have to be completely disconnected from the traditional Mario lore/universe. Now what we don't find out is why this limitation has been set in place, or where the directive came from.