In the game there is a man named "Remove Kebabovic" which is an obvious racist joke towards Serbians because of the stereotypical name. I was personally offended that this game would insult my ethnicity and make jokes about Removing the Islam that was not a joke. Serbia has been one of major players in removing the Turk and such a name diminishes our efforts and experiences. There will always be more Kebab to Remove and having a racist name like that in a joke of a game serves to undermine our cause.
The first few games, Super Punch-Out!! And Mike Tyson's Punch-Out!! Were certainly filled with a bunch of racism. With its characters spitting out gibberish and characters displaying their racial stereotypes such as Vodka Drukenski as a Russian boxer and the Italian insert named Pizza Pasta. Racism can now displayed practically anywhere even in a simple game
Stereotypical characters are frequently used by game developers to add comedy. They make the game more relatable. Stereotypes are only problematic when people want them to be. For example, I'm Irish and I find the stereotypically Irish character Aran Ryan quite funny and not one bit offensive. The only people I know that see a problem with this only see it as they like to play the victim in order to gain unneeded and divisive "sympathy" for their culture.
All of the games stereotype everyone, and does not make one race better than the other due to all races being made fun of. This is not racist. Plus, the game is supposed to be funny like that, all of them. This includes names of characters and how they act.
Sure, the old games do exploit stereotypes, but not in the technical sense. Racism is meant to portray your own race as superior, but Punch-Out!! Doesn't do that. Piston Hondo is Japanese, and the original company that made Nintendo is Japanese. If that isn't enough for you, NLG is Canadian. They make fun of every race, and even if you say "It's still offensive!" Pizza Pasta didn't offend me at all.
Mike Tyson's Punch-Out!!, Super Punch-Out!!, and Punch-Out!! Do exploit stereotypes and can be considered offensive. But being racist means you think that your race is superior to another, and Punch-Out!! Makes fun at every, or at least most of, major ethnicity and nationality. It treats none of them any special, everybody gets exploited. From Pizza Pasta to Soda Popinski to Bear Hugger. Plus it's supposed to be a joke.