Year of the Dragon introduced new characters and minigames to the series, as well as offering improved graphics and music.

Year of the Dragon received positive reviews from critics, who noted the game successfully built on the formula of its predecessors.

Year of the Dragon was the last Spyro title released for the original PlayStation, and the last developed by Insomniac Games due to Universal Interactive Studios and Sony's souring relationship.

These gems are used to bribe a bear named Moneybags to release captured characters and activate things which help Spyro progress through levels.

[3]: 10–11  Each critter has their own special moves and abilities; Sheila the Kangaroo, for example, can double jump, while Sergeant Byrd is armed with rocket launchers and can fly.

Spyro meets with Sheila the Kangaroo, Sergeant Byrd the Penguin, Bentley the Yeti, and Agent 9 the Monkey, all who help him on his quest.

After developing the first-person shooter Disruptor, Insomniac Games worked on a third-person platformer that became Spyro The Dragon (1998).

[6] Among the features added was "Auto Challenge Tuning", which was designed to dynamically and invisibly adjust the game's difficulty.

[5] Price also noted that their personalities helped freshen the story, which he considered a much more evolved and "coherent" plot than the one originally created for Spyro the Dragon, due to the studio's greater experience.

[2] The music for Year of the Dragon was composed by Stewart Copeland, former drummer for the rock band The Police.

[7] In an interview, Copeland stated that his creative process for writing the music for the Spyro series always began by playing through the levels, trying to get a feel for each world's "atmosphere".

[9] He complimented the compact disc format of the PlayStation and its support for high quality audio; there were no technical constraints that stopped him from producing the sound he wanted.

[9] Copeland recorded entire orchestral scores for extra flourish when the visuals called for an expansive sound, but used more percussive and beat-driven melodies for "high-energy" moments in the game.

Since as much as half of a game's lifetime sales occurred during the early release window, Insomniac considered their effort a success.

[19][27] Andrew Reiner, writing for Game Informer, said the gameplay managed to be accessible for audiences of all ages, while still offering a challenge.

[20] GamePro noted that the ability of the game to automatically drop the difficulty if players get stuck was an excellent feature.

[4] Simpson and Salzman highlighted the lack of frame rate issues despite the graphics,[4][18] though GamePro noticed infrequent slowdowns in the most hectic scenes.

[6] In an interview, Ted Price said that the company stopped producing the games because they could not do anything new with the character, and that after five years of development on a single series, the team wanted to do something different.