Armed with all-new character animations and a completely reworked physics engine, Episode II will expand the Sonic 4 storyline with new areas to speed through and new challenges to face.
In regards to Episode II, Sega Brand Manager Ken Balough has mentioned that "the idea is to introduce new zones with things you haven't seen." He has also hinted that Episode II may have a larger budget than Episode I, due to the latter being received very well commercially. Sega of America Community Manager Aaron Webber also hinted that Tails may appear in Episode II as well. On August 23, 2011, Sonic Team head Takashi Iizuka stated that “this year, 2011, is the anniversary, so we’re focusing on the celebration title, but moving forward to 2012, Sonic will still be going, so I’d hope to provide Episode 2 then.” He also said that Sonic Team “knew about the anniversary year," and that "Generations was planned way in advance," therefore "it was always our plan to release Episode 2 after Generations.” However, he stated it is unknown if future episodes will take place after Episode II. In preparation for Episode II's release, Sega re-released Sonic the Hedgehog CD to digital platforms in Winter 2011, billing it as a 'prequel' to Sonic 4 as the events of Episode II will rely heavily on what occurred in CD.
