Rob Letterman (Goosebumps) is directing the film, which will start shooting mid-January in London.
The story is about a teenager who teams up with Pikachu in order to find his kidnapped father. As fans of the franchise will recall, Pikachu was protagonist Ash's best bud, accompanying the trainer on his adventures as he fought to catch 'em all. Newton's character, a "sassy journalist", tags along.
Reynolds will play the titular Detective Pikachu.
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IGN reports Reynolds had been one of several names reportedly being considered for the role alongside Hugh Jackman, Mark Wahlberg, and Dwayne "The Rock" Johnson.
The movie is based on a 2016 Japanese video game that requires players to solve mysteries with the help of a talking Pikachu dressed like Sherlock Holmes.
Many details of the project are being kept off the grid, including the casting, which has been underway under the radar by the usually secretive Legendary. The film is written by Alex Hirsch (Sony's Animated Miles Morales Spider-Man Film) and Nicole Perlman (Guardians of the Galaxy, Captain Marvel) and will be released by Universal everywhere but Japan, where Toho will handle distribution.
Though Pokemon began life as a card collecting game, it soon spread itself into multiple arenas, with a variety of anime shows and video games. Universal Pictures will handle distribution in the USA and in foreign territories outside Japan.