Sonic the Hedgehog 4: Episode 2 is the sequel to Sonic the Hedgehog 4: Episode 1 and the second game in a sub-series based around the 2D side-scrolling Sonic gameplay from the '90s. The overall gameplay is largely identical to the first game, but it has a new engine and this title introduces Tails as a second, playable character for local (same screen/Bluetooth/Wi-Fi) or online cooperative play. The two characters are always together on the screen and without a second player the character is controlled by the computer. While most of the moves are identical to the first game except for some tweaks in response handling, the two can now work together as in some of the original games. Tails can fly to lift Sonic up to places he cannot reach otherwise or over obstacles. The two can roll together in a ball to perform a spin attack and underwater merging the two has Tails use his tail as a propeller.
As hinted at in the special ending of the first game, this episode brings back Metal Sonic who has survived his defeat in Sonic CD. Heavily damaged he was left behind on Little Planet, but Dr. Eggman manages to locate and repair him, until Sonic and Tails get wind of that and Eggman's plan to build a new Death Egg over Little Planet. The settings include submerged ruins, sandblasted oil refineries, an aerial fortress and a funfair called White Park.
Just like in the first game there are special stages accessed by collecting at least 50 rings in a single level and then jumping in the giant ring at the end. In these half-pipe-like stages as featured in Sonic the Hedgehog 2 the characters need to collect a certain amount of rings to get the Chaos Emerald at the end. This title also introduces Red Star Rings, previously featured in Sonic Colors and Sonic Generations, with one of those rings hidden in each act.
Owners of the first title on the same device are rewarded with additional content. After completing the first act the game checks for a save file of the first episode with at least Splash Hill Zone Act 1 completed. If successful, Episode Metal is unlocked on the world map of the second episode. Plotwise it ties together the events between Sonic CD and Sonic the Hedgehog 4 and it contains four acts, which are re-worked versions of Zone 1 of the first episode, where the player controls Metal Sonic. This lock-on feature with additional content was also common for many Sonic game combinations in the '90s.
A version of Sonic the Hedgehog 4: Episode II was considered for release on the Wii as a WiiWare title, but was ultimately scrapped due to the size of the download it would be. The game's cutscenes and 3D visuals would cause the download to go over the 40 MB limit of a WiiWare title.