Pokemon abilities are one of the pillars of the competitive scene. Sometimes, creatures with poor movepools and stats survive thanks to their ability. Other times, an ability could be so detrimental as to lower any chance it would have in battle. While exceptions exist, an ability is usually key to ensuring a Pokemon's competitive longevity.
Pokemon abilities are a passive mechanic that have an effect in battle. The mechanic was introduced in Generation III, and was expanded in Generation V with the introduction of Hidden Abilities. While there are overworld-specific ones like Illuminate and Pickup, this article will focus on those that play a role in battles. Specifically, battles that take place in the competitive arena.
How useful are Pokemon abilities in competitive games?

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The introduction of Pokemon abilities in Generation III marked a huge shift in the competitive scene. The best way to look at this will be through three Pokemon who were decent battlers in the previous generation. However, after getting their abilities, they became top-tier threats.
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Gyarados was one of many Water-types in the Generation II meta. While it had decent special bulk and an Earthquake immunity, it was outclassed by other Water-types like Suicune, Starmine, Cloyster, and Vaporeon. Then, in the next generation, it got Intimidate. Intimidate lowers the opponent's attack by 1 when the user switches in. This gave Gyarados a role as a stat-lowering pivot.
Gengar was a good Pokemon in Generation II, thanks to its wide movepool and Ghost-typing. However, it became even better in Generation III with the ability Levitate. This gave the poltergeist an immunity to Ground-type moves as opposed to its previous weakness. As a result, Gengar became one of the top threats in Generation III.
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Tyranitar was already a top-tier threat in Generation II thanks to its 600 BST and ability to check meta staples like Snorlax. However, its ability Sand Stream gave it a new dimension to its gameplay. When a Pokemon with Sand Stream switches in, it sets up sandy weather. This dealt chip damage to all creatures (except for Rock-, Ground-, and Steel-types), essentially warping the meta to its whim.
Can a Pokemon ability hinder a Pokemon?

Pokemon abilities can also work in negative ways. For instance, Slaking has a BST of 670, which is on par with most Legendaries. However, it has never been able to reach its full potential thanks to its ability Truant. Truant prevents Slaking from doing anything on every alternate turn. This makes the Pokemon far too difficult to fit on a team.