This brings up an interesting discussion of what defines a "video game character"? It almost seems to me that the Digimon from their original devices are more video game characters than Mr. Game & Watch.
First of all, in order to define a
video game character you need to define a "video game". I've only done a little bit of research but from what I've seen it's hard to determine what a "video game" is and what an "electronic game" is. I've seen people make the distinction from those Tiger Electronic games from a regular video game. But why is that so? Is it because those games are not presented in the "video" format? So I tried to look up "what is a video?" And I get sort of a vague definition that encompases a ton of different things. This subject hasn't really been thought of thoroughly. Or atleast I haven't seen a real serious discussion made on it... just petty arguments.
So for the sake of argument lets use the broadest definition of a video game which is:
A game played by electronically manipulating images produced by a computer program on a television screen or other display screen.
"Other display screen"? I guess that means Digimon, Game & Watch, and Tiger Electronic games count. After all, they are games played by electronically manipulating images on a display screen.
But are they video game "characters"? Well the Digimon are certainly characters! But Mr. Game & Watch?
No. He's not a character. Well. He wasn't one until Melee created him. He's a made up character that was used to represent a variety of Game & Watch games. Since then he's appeared in other titles like Game & Watch Gallery 4. But he didn't really exist until Melee conceptualized him.
Therefor I'd argue that Digimon should be considered video game characters! However, I don't really want Digimon in Smash. But that's just my personal opinion.