Sonic Mania 2 was never in the works because Sega and its devs wanted to move away from pixel art and “make something fresh”

rockpapershotgun.com:

Sonic Mania 2 isn’t in development and never was, according to the devs behind the celebrated 2D revival of the blue hedgehog. Contrary to rumours, that’s not because of a falling out between publisher Sega and Sonic Mania’s devs, but because both sides of the creative team decided they wanted to make something new.

That’s according to a recent Game Informer interview with Sega's Takashi Iizuka and Sonic Mania lead developer Christian Whitehead, which casts some light on the discussions between Whitehead, studio Headcannon and Sega “to consider concepts for the next generation of Classic Sonic” after Sonic Mania’s rapturous release in 2017.

Both Iizuka and Whitehead said that Sega and the devs agreed that whatever followed Mania would need to “move beyond” the pixel art style used as a throwback to Sonic’s 16-bit origins.

For Izuka and Sega, that consideration came down to maximising the possible audience for a 2D Sonic platformer.

"When you make a 2D game using pixel art, you kind of end up targeting a very specific core audience," Iizuka said. "We wanted to bring this game to as many people as possible and in order to really make it look and feel as appealing to a wider audience, we needed to use the 3D assets to really give it that current look.”

Meanwhile, Whitehead expressed that his own studio, Evening Star, had always planned to create 3D titles and original IP on the back of Mania’s success, rather than focusing solely on 2D pixel art - adding that the developers created a 2.5D Sonic prototype in its own Star Engine.

“Sonic Mania 2 was never in development, though, because we actually agreed early on that we should try to make something fresh, like hand-drawn 2D or 2.5D,” he said.

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