Shading isn't terribly hard and you could probably afford to be a little sloppy in this case. I would suspect that you'll end up spending about 2 times as long on each animation than you would have before.
BUT, with that 2x effort, you're getting a significant improvement in visual quality. The alternative would be the Donkey Kong Country option: model the character in 3D (easily 10x more effort than flat 2D animation, with a much more expensive work force and software), bake in the lighting, and generate gigantic animation sheets. Your asset library will explode in size. The games that have done this have tended to employ significant compression on the images, which can negatively impact visual quality.
Besides, the 3D rendering technique is apples compared with the oranges of pixel art. There's really nothing like artisanally crafted, locally sourced pixels made with love ;)
Yeah, as a technical guy I would tend to go with the full 3D route. It might be 10x the upfront work but having a fully automated pipeline might save you a lot of work down the line. For example just changing the color of a character could be as few as two clicks in the full 3D solution, but you might have to manually go through each sprite sheet with the other route.
And technically you could export the sprite sheet with however many frames you want (and be able to lower and increase the number easily) while still getting the exact same results as the Sprite Lamp solution. And of course artists could go in and manually make any changes they want.
It's interesting hearing the perspective of the artists. Thanks.
If you're hand-crafting sprites there's a good chance you're using a palletized paint program, which makes changing a character a matter of two or three clicks.
Also there are major stylistic advantages to drawing it by hand. Check out the baked-in motion blur on Sonic's feet in this sprite rip of Sonic 1: http://www.spriters-resource.com/genesis_32x_scd/sonicth1/sh... a while back there was a 2.5d Sonic game, and its motion had a lot less impact because no attempt was made to replicate the motion blur.
Plus of course if you're just drawing it you don't have to worry whether or not it actually makes sense - a lot of the more stylized cartoon characters are VERY hard to build spot-on 3d models of, because they're full of weird abstractions that only make sense in the 2d plane.
And finally, some people just don't like modeling stuff in 3d.
You could easily combine both worlds. You don't have to bake in the lighting. Just export the light maps, and then use them with a tool like Sprite Lamp to dynamically merge them in at runtime.
BUT, with that 2x effort, you're getting a significant improvement in visual quality. The alternative would be the Donkey Kong Country option: model the character in 3D (easily 10x more effort than flat 2D animation, with a much more expensive work force and software), bake in the lighting, and generate gigantic animation sheets. Your asset library will explode in size. The games that have done this have tended to employ significant compression on the images, which can negatively impact visual quality.