Thankfully, developer Minority realized that the art is incredibly appealing, and wrote up a post on the US PlayStation Blog detailing the history of the graffiti. As it turns out, rather than using source images and recreating a facsimile of South America's street art, Minority worked with three renowned South American artists to develop images for Papo & Yo's world.
Sebastian Navarro (AKA Charquipunk), Simon Paulo Arancibia Gutierrez (AKA La Robot de Madera) and Inti Castro (AKA INTI) are all collaborating on the game. One such example of their contribution is just above, though I saw several different, very impressive pieces in just the 20 minute demo at E3. Of course, we'll all get to take a closer look when the game launches on August 14 on the PlayStation Network.