2D, or two-dimensional, is the concept of everything being on one plane of existence. A being within a two-dimensional plane can only move along the horizontal X-axis and the vertical Y-axis. The Z-axis, which defines depth, is considered null. A classic example of two dimensional graphics and gameplay is Super Mario Bros., a side-scrolling platformer in which the player is limited to movement left, right, up, and down. The game popularized a school of game design that influenced its genre for generations.
Two Dimensions vs. Three Dimensions
Before the advent of widespread three-dimensional graphics, some games employed visual tricks such as isometric viewpoints to create an illusion of three dimensions. Such games cannot be considered 3D, however, as optical effects are comprised of 2D elements.
Two-dimensional games were most frequently developed in the early years of video games for various reasons. One reason for this is that the technical limitations of game hardware prevented the ease of creating three-dimensional graphics. During the Super NES era, Nintendo developed a scant few games that made use of what the company deemed the "Super FX Chip." This special chip allowed for the development of games using rudimentary polygon graphics for games such as Star Fox and Stunt Race FX.
As game hardware improved in the PlayStation and Nintendo 64 era, game development shifted focus away from purely two-dimensional gameplay. Platformers, which had for so long been defined by Super Mario Bros., began taking influence from Super Mario 64. By the start of the PlayStation 2 era, 3D game development had greatly overwhelmed the circles of professional development.
However, with the rise of indie development and digital distribution services such as Steam, Xbox Live Arcade, PlayStation Network, and WiiWare led by games like Braid, Limbo, and Shadow Complex, two-dimensional game design has returned to the spotlight. This renaissance has in turn influenced the design of larger games such as New Super Mario Bros., Bionic Commando Rearmed, Street Fighter IV and Mortal Kombat; all high profile games that mix 2D gameplay with 3D sensibilities.
The idea of "2.5D" is an odd footnote in the discussion of dimensions as depicted in game design. Originally meant to refer to novelty games such as Pandemonium! and Klonoa, which combine 2D gameplay with 3D graphic design in an era when such a design was unusual, it has since fallen out of use as more games have come to mesh 3D graphics with 2D gameplay.