>>150373233
It was mostly because Nintendo did not trust the idea in general after how poorly the Mario movie went.
Super Mario Bros and Godzilla '98 have two things in common
>An egomaniacal director fresh off some successful products who leveraged their rising star to take the reins and disregarded the existing property
>The Japanese companies and studio heads literally okaying everything then completely shitting themselves and pretending the mean gaijin ruined their property with no input from themselves when the final product which everyone hated