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sm-trivia  - Shigeru Miyamoto stated that the reason Princess Peach wasn’t playable in New Super Mario Bros. Wii was because they would need additional programing to handle how her dress reacted physically within the gameplay.
"Sorry Princess! Nintendo can’t afford the extra programing!"
picture alone…wish I knew who drew it.
I wondered that, too. And even if they didn’t want to use her, it seems like they have enough available characters...
If that’s true, why not give her shorts or a shorter skirt like she’s worn in some of the sports games?