I've been playing Naruto Online recently and for a while now, I've realised that they use 3D Models for the games.
The sprites look identical to characters rendered in the Storm engine, and alt costumes for the Main Characters are clearly just model swaps reusing the same animation/poses.
There's also the small matter of the trailer:
They modified the final boss fight in Storm 2 to include the MCs as a promotion for the game. Sadly, there aren't cutscenes like this in the game (aside from some badly ripped ones from the games, but no cutscenes involving the MCs), but clearly they have 3D models that exist.
Since I'm on the subject, there's plenty of characters playable in this game that aren't in the Storm games.
- The Kage Bodyguards (All of the ones that appeared at the Kage Summit)
- The Six Paths of Pain (as separate Characters)
- Kinkaku & Ginkaku
- The former InoShikaCho (Inoichi, Shikaku & Choza)
- Monkey King Enma (for some reason. Don't get me wrong, it's cool he's playable, but still...)
- Mabui (this one baffles me even more since she's not even a fighter)
The Chinese Version has more characters too such as:
- Zaku (Bizarrely the only of the Sound Trio that's playable)
- Samui (No Karui oddly enough)
- Pakura (but no Gari for some reason)
- Zetsu (FREAKING ZETSU!!!!!)
And as for some other minor characters represented as NPCs:
- Gato's Bodyguards (Zori & Waraji)
- Oboro & Mubi
- Shiori & Baiu
- And I know they aren't actually characters, but the Puppet Ninja from Ultimate Ninja Impact seem to have been added as generic enemies with several palette swaps here, so it's not just Storm assets that are being utilized here.
CC2, I think you're holding out on us.....
Sadly, we'll probably never get access to the models of the ones that aren't already in the Storm games.
It is REALLY hard to recreate certain aspects of the characters (I mainly have trouble with hair & faces).