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Originally Posted by IndigoArms

Any reason why the monsters and Ultraman have to be CG?

I can't remember if there ever was an answer to that from official sources, but supposedly it's because Hideaki Anno wanted to really emphasize the "Alien" aspect of Ultraman for the film, this is also why Ultraman's proportions are so weird to. It's intentionally meant to look off so that it puts the viewer more in a panicked civilian characters' perspective rather than Ultraman's. Imagine fleeing from kaiju and then this giant, red, vaguely human looking... thing suddenly just manifest out of thin air and start's wrestling with it.