Speaking to Gamasutra, Game Freak designer Hironobu Yoshida has given insight into the Pokemon creation process. As we approach the 700s on the Pokedex with Pokemon X and Y, one can only imagine how much of a challenge it is to stay on point while still covering new ground.
"Since there are 20 of us and we're working all on our own ideas, we want to make sure we're not overlapping ideas," says Yoshida. "At Game Freak, we have an internal server where we can upload our designs and share them with everyone else on the team. This allows us to see what everyone else is working on and get ideas from each other."
A five-person committee gives final approval on which designs will make it and leaves feedback for those that aren't deemed strong enough. "What that lets us do is improve for the future, so we can use that knowledge for the next series of titles," explains Yoshida. He says that "There are probably five to 10 times the number of ideas that are rejected as the ones that make it into the final design, so it's a very difficult process."
I'd love to see these rejected designs, though something tells me that won't happen anytime soon. Maybe Game Freak can hold a contest straight out of Charlie and the Chocolate Factory.