Development took another two years due to the move to the then
new PlayStation 2, and this caused not only many issues as minor yet
important as the models' shadows not working, but also for some things
to have been scrapped, such as the co-op mode.
In addition, the new hardware also allowed for the game's cutscenes to
be rendered in real time as opposed to using FMVs, and Matsuura wanted
to use this as an opportunity to allow the players to edit these
cutscenes if they wanted to, but this idea was scrapped as well.
Much like in the previous games, Gabin Ito wrote the storyline for PaRappa 2 with Matsuura's oversig and Rodney Greenblat designed the characters. Due to the zanier plot. Rodney had a harder time getting the character designs right. For example, the namesake and theme of Beard Burgers was based on Gabin Ito's idea of Beard Burger Master being German.
When it came to promotion, however, PaRappa 2 was marketed just
as much, if not even more than previous titles. In Japan alone, not
only were collaborations with companies such as McDonalds made, but an
anime adaptation was outright announced in order to further promote the
game.
Meanwhile, in the West a hip-hop themed ad campaiugn was created in
order to market the game in the United States, and press kits featuring
the game were made for both the North American and European regions in
order to show the game at expositions and as assets for the gaming
press.
However, this promotion didn't help much, as PaRappa 2's reviews
in gaming magazines and websites alike across the West mostly agreed on
it being bare and old-hat, while the constant excecutive meddling and
troubled production of the anime led it to become a flop in Japon, with
multiple stations dropping the show after 17 episodes.
This one-two punch situation caused the franchise to go on a status
of limbo following the anime's end, and no new game in the PaRappa The
Rapper franchise has ever been announced since then.