2.5D vs. 2D

Yes, these two game types are in fierce competition. The classic 2D side scroller with games such as Super Mario Bros., Legend of Zelda, etc. with all of its sprites and such on consoles such as the Nintendo Entertainment System, Game Boy, Nintendo DS, etc. However, in our new age of polygons and textures (well, not that new), sprites have been suffering a trend of becoming obsolete by new technologies, such as creating 3D models to go on flat 2-dimensional planes. A good comparison would have to be Super Mario Bros. and The New Super Mario Bros.

The original game for the NES had nice flowing sprites, but each sprite took up quite some space. In New Super Mario Bros., they had live-rendered polygon-filled models, of which didn't take as much space, because it was simply one model and the game specifying how it should bend and morph. However, in more modern games with high-polygon models and high-resolution textures, simple high-resolution sprites actually sounds better. However, it depends mainly on the resolution and quality of the game. If it is something like The Legend of Zelda: Four Sword Adventures, then you would want to have 2D mainly to have a larger over world and also be able to work with the Game Boy Advance. However, it could have also been in 2D to maintain the style that was achieved in the original game and The Legend of Zelda: The Minish Cap. Of course, a 3D version of the game would have worked if models from The Legend of Zelda: The Wind Waker were used. So, it mainly depends on what the producers are aiming for when it comes to making the game. It also helps to achieve a certain art style or animation technique. Some want a fluid and cartoonish look, while some want a more nostalgic look in the modern era.