When deciding whether or not something is good or not for children (and for yourself for that matter), it is always good to weigh the good and the bad to see which one overrides the other, so to speak. Let's start with the good.
i) It's entertainment. The Pokemon games were pure entertainment, and the storyline is half-decent. Battling with make-believe animals is pretty cool, and at least they don't kill each other.
ii) Numbers involved. There are constant simple math equations involved in playing Pokemon (especially the cards). So, it could potentially help with math.
iii) (sort of similar to point i) It creates a bond between the players.
Now, the bad...
i) The characters "evolve" into different "lifeforms" based upon a set structure. That is, by definition, evolution, and it promotes this lie.
ii) There is a certain "type" of Pokemon called the "Psychic" type. This in and of itself is enough evidence to prove that there are New Age influences in the Pokemon games. Just look at this Pokemon's head: (search Abracadabra on google)
It is clearly a pentagram.
The Psychic type can also manipulate other Pokemon and transport themselves using their powers. It is unhealthy to expose children to this kind of stuff.
iii) It creates a sort of desensitization to violence between animals. Not saying I am a "tree hugger" but God did not create the animals for mankind to utilize them in such a manner, and although they are fake, some children cannot distinguish between fiction and reality.
Point iii is not necessarily enough for one to avoid the Pokemon games altogether, but points i and ii definitely are.
Now, if there were to be a game similar to Pokemon that came out and had the same concept yet subtracted the magical element along with the evolution aspect, I would not necessarily see too much of an issue with it (if made out to be that there is a clear good and evil and that the opposing creatures were predatory and your creatures were there in defense of yourself; not to pit them to the death for money), other than the violence between animals. Alas, in the present state of the world, this sort of thing is nearly impossible.
Do the cons outweigh the pros? Certainly.
Can the cons be avoided? The first con is unavoidable (unless you forcibly stop your Pokemon from evolving, yet this is a core concept in the series). The second con is to an extent, but the fact that there is any New Age content in a game that is not changeable by you (as opposed to putting different lyrics over a song structure) is a troubling aspect.
What does this mean?
Avoid Pokemon and seek healthier alternatives.