The Special Zone is where the Special Stages take place. It is an important reaccuring zone in the Sonic the Hedgehog video games. The stages are separate in location from the usual setting of those games (either Earth or Mobius), in which characters can find the mysterious Chaos Emeralds. According to most canon the special Zone is a paralell universe made of Chaos Energy. One could quite easily obtain rings through challenges.
In New Genesis, the Special Zone is a parrallel dimension from Mobius/Earth where the chaos emeralds return after being brought together due to Fang stealing them from Mobius and selling them in the Special Zone, often to the VIrals. Some centuries ago, due to the Knuckles Clan's attempts to use the emeralds resulted in half of the clan being transported to the special zone along with half of the Raiju Clan, half of the human population, half of the Babylonians, and others. In that dimension, the Virals are the dominant clan/royal family there. Due to Fang's travels there, Wind the Hawk got suspicious and followed him, resulting in him getting transported there and becoming the Princess' friend, then lover. Later when Wind and Princess Chelo attempted to get to Wind's native zone, Daemon caught them and killed Wind before Chelo and Wind were transported to the alternate dimension. Months later, after conquering much of the Special Zone, King Slasher Viral and his queen, Daemon have launched a full scale war on the Prime Dimension. The battle begins.
An ever changing chaotic zone where most of the Special Stages from the games take place.
The Special Zone is a pocket cosmos created by the warping powers of the Chaos Emeralds. Despite the altered reality the laws of physics still seem to apply here as well as plenty of natual air, possibly because despite being a chaotic realm, it is still a zone of (or near) Earth.
The location is always in a state of creation and usually scattered with pipe shaped run ways (mostly half-pipes), mazes made of crystal and also scattered planetoids all together in this cosmic mess. As the Chaos Emeralds return to the Special Zone (which is usually at the end of every Sonic game that involves the seven emeralds) they will scatter, causing a warp of confusion to expand and/or change the Special Zone and to create a Special Stage around each emerald. After a period of time each Chaos Emerald will return to Earth and be scattered across the four corners of the world. That is unless someone enters the Special Stages and collects them one by one. When the Chaos Emeralds return to the Special Zone, the process starts again, warps of confusion breaking down or expanding the Special Zone to create more confusing challenges for those who seek out the emeralds. The Special Zone is also where rings go to when they are lost or spent on sustaining super forms. They scatter across the Special Zone (and line the Special Stages) until they are re-energized and also scattered across the world.
In Ultimate Sonic, the Special Zone plays a more intricate part of the story than just a location where the Chaos Emeralds reside. After the events of Sonic Adventure, semi-spiritual entidy Tikal the Echidna and the now peaceful God of Destruction Chaos reside deep in the Special Zone living in a dream bubble of the Emerald Altar (during Tikals lifetime). However the Special Zone has been disturbed by Mephiles the Dark who seeks the Black Chaos Emerald.
Prism Palace is a location between the Special Zone and the Master Emerald and through it can access Tikal's dream bubble. It design is inspired by such places as Crystal Egg Zone, Hidden Palace Zone, Lost World and Kingdom Valley.
It is planned the game may actually have Special Stages in which for Sonic's story he will have to progress through them. They will consist of either classic half-pipe runs or crystal mazes in which at corners or certain parts of these mazes quick-stepping can give Sonic an instant 90° turn. Special stages can switch from half pipes to labyrinths during run to confuse Sonic further. In these stages, Sonic must race Nack the Weasel to the Chaos Emeralds at the end, however his Boost will be constantly on and if he runs out of rings will loose the emerald to Nack.