So if Dharkon is going to be the origin of Mr. G&W...what exactly ARE the Shadow Bugs? (I have a headcanon myself, but it's rather...dark.)
I wouldn’t imagine that Dharkon created Mr. Game & Watch, but that they’re both from the Dark Realm.
As for the Shadow Bugs, I have a couple guesses, though neither one is perfect.
1. Least plausible, but still worth mentioning: They could be flesh.
2. A bit more plausible, but not a great theory: They could be his blood. The way they’re drawn from G&W’s body could be similar to getting blood drawn.
3. The most plausible of the options: They could be bits of darkness energy.
The reason I say this is the most plausible is because there’s a lot of supporting evidence.
For one, the Shadow Bugs forming Primids look strikingly similar to the captured fighters in the Dark Realm.
Second thing is: if it’s darkness energy, it’s more likely for there to be lots of it in Mr. Game & Watch’s small body.
Third, based on the way that it’s used to form Primids (and a couple of other enemies) is fairly similar to the way Mr. Game & Watch transforms in battle for his various attacks (most notably his Final Smash), which would most likely use some amount of energy or magic.