What Happens at the End of Terranigma?
The twist lands in Chapter 3. Ark has done everything the Elder of Crysta ordered, continents, life, civilization, and the Elder tells him his mission is fulfilled and he may now die. The Elder is Dark Gaia, the Devil of the game's two-will cosmology, and Ark was its instrument: only a creature of the Darkside could raise the surface world into a shape Dark Gaia meant to rule. Ark, the village of Crysta, and Ark's beloved Elle are all creations of the underworld, built for this purpose.
Saved by the sage Kumari, Ark gathers the five Starstones and summons his Lightside self at Dryvale, at the South Pole, where God and Devil fought their last battle. The Lightside self names him the legendary hero, and kills him. Chapter 4, "Resurrection of the Hero," opens with Ark reborn as a baby, carried by the soul of the surface world, Light Gaia. Darkside Elle, sent to kill the threat he represents, recognizes the child instead, and later gives her life to kill the traitor Yomi and save him.
Ark defeats Beruga, returns to the underworld, and destroys Dark Gaia, knowing the price in advance: everything Dark Gaia made, Crysta, its people, and Ark himself, vanishes with it. Light Gaia tells him that as creator and defender he is what humans would call a god. He sleeps, and dreams he is a bird flying over the world he made, watching it grow old. The epilogue cuts to the Lightside Elle, in her original home, answering a knock at the door. The game ends on the knock. It never shows who is standing there.