Looking at the "real life models" Sonic looks terrible but he kind of resembles what a real life version of Sonic would look like. The character is too much of a cartoon to translate to real life without looking ridiculous. But there really is no excuse for the Mario movie character design. Mario's strangest features are his proportions (giant nose, short height) but by using a live actor they've decided to ignore that. Okay, so it should be easy after that. Mario wears overalls, a long-sleeve shirt and a hat - all real life clothing items. You could probably buy 90% of that off the rack at a clothing store with the "M" on his hat being the only custom item. But they've got him wearing red and blue coveralls with a collar and breast pockets. What the hell outfit is that? That looks like a Mario costume you'd get from someone who has never seen the videogames and had the outfit described to them over the phone. Of course this is also the movie that depicted Luigi without a mustache so the design team was failing pretty much from step one.
This isn't hard, guys. Look at the box art of the games and make the character look like that. And if you're changing things on purpose because you think you know better remember that Nintendo made the iconic character that's comparable to Mickey Mouse or Superman... and you've made **** all. If you were so brilliant you'd be the guy that created the billion dollar franchise, not the mook buying the film rights to it.