Why is there a whole second region in Pokémon Gold and Silver?

Gold and Silver's most famous design decision is structural: after the Elite Four in Johto, the player travels to Kanto, the setting of the first games, and collects its eight badges too, sixteen in all before Mount Silver opens. The Kanto that waits is scaled down and three years older, its landmarks decayed or transformed, a sequel folded inside its own game.

The internet's favorite explanation credits Satoru Iwata, who built compression tools for Game Freak, with shrinking the game so dramatically that Kanto fit as a bonus. The story is told everywhere, but the primary source does not quite tell it. In the Iwata Asks interview for these games, Shigeki Morimoto thanks Iwata for the tools for compressing the Pokémon graphic code, and Iwata confirms making them after hearing the studio's concern. Neither man says the tools made room for Kanto.

The region's presence also predates the finished game. The Space World 1997 demo of Gold and Silver used a map based on the whole of Japan, with Kanto included as a large city inside it. Kanto was in the concept from early on, even if the final post-game region, reached by ship and train after the credits, is a different construction from the demo's single landmass.

What is documented is the scale of the effort: three and a half years of development with only about four programmers, on a team small enough that Iwata, then president of HAL and not yet a Nintendo executive, was reading their source code and porting their battle system to the Nintendo 64 in about a week. Kanto is in the game because a tiny team aimed a sequel at being the complete Pokémon, and the compression story, true in its tools if not in its legend, grew from that ambition.