You can update your game into v1.2 but if you have the sciresM patch that allows you to inject pkmn using the QR Scanner, the game will crash; you have to remove the patch.
Also, the update is mandatory in order to use any of the online features (trade, online battle, etc.)
If you have Luma and a9lx installed in your console, its safe to update. My game crashed because I was using the sciresM's patch. I disabled it and my game is working ( I just can't use the QR Scanner to inject pkmn until sciresM updates his beautiful patch )
~Sorry for my bad engrish