The first question to answer is probably as follows: Why choose a game in an existing IP but create a total alternate universe?

As usual, there are a few reasons, but I'll summarize.
1.) The zoids canon splits several ways, and it can be difficult or impossible to get every canon to make sense together.
2.) Of the most presented canons (the anime), New Century Zero lends itself more to an arena style game and Chaotic Century/Guardian Force, while tempting for an RPG, would require extensive resource creation due to the expansive traveling. The Spiderman and Zoids comic was fairly well distributed as well, but was a poor candidate to jump mediums (if you haven't, check it out though).
3.) I didn't want anyone to need foreknowledge of the zoids universe to be able to fully enjoy the game. This made any adaptation of canon material rather difficult to do while still crafting strong characters. I'd first have to identify what shaped them, then communicate that to the players via actions that made sense within that universe. Not a totally impossible task, but a large undertaking on top of the other issues.

In short, low visibility and inter-universe inconsistencies have rendered the zoids canon less malleable than others. Even the official zoids games by and large have opted for new material. Those that include existing characters do so mostly via cameo; they assume that the player already knows who these people are and do not spend much, if any, time developing them.

The next question is likely: Why this? Well, I first looked through other zoids games to see what made them work and what didn't go over well. Obviously, zoids were a must, but Zoids Assault showed that zoids alone were not enough. Outside of the visuals, which were too grainy by most tastes, the game offered little in the way of interesting combat, not much in the story department and zero in terms of characters. In contrast, Zoids Battle Legends had exciting, if questionably balanced combat and its own cast of characters. It may not have been a masterpiece, but it was fun through and through, which is the ultimate judging point of any game. Zoids Legacy lacked when it came to graphics and was pretty light on plot and characterization, but offered something to play with in several zoids universes while also delivering fun. The bits of characters that it offered triggered several welcome nostalgic highs.

CC/GF was fun to watch not just because of the zoids, but due to the interesting characters and the conflict they experienced. I didn't wake up at five in the morning to see just a Shield Liger. NCZ is much the same. Just try imagining it without the Toros family.

Thus, I knew that it wasn't just enough to rip some sprites and have anonymous pilots blast each other to bits. Part of the genius of the series is that it has serious, violent conflict all around, but doesn't feel as dark as something else trying to take all of that on. However, that conflict is meaningless without characters.

The first issue to solve was the zoids themselves. Specifically, where did they come from? Also, how did humans and zoids end up in the same place? There are a couple of different, but similar, canon explanations, though they left a few loose ends when extended outside of their source material. For example, the Ancient Zoidians in CC/GF exhibited all manner of supernatural abilities, but no explanation was ever given.

Knowing this, I decided to create a world where the traditional explanation held, but that also took into account and codified the Ancient Zoidian powers. I also wanted to avoid the space/time travel elements present in some of the other canons as those tend to get really hairy really fast in a rather unsatisfying manner if not carefully managed. In addition, since I had a heavy incentive to avoid any setting with cities (resources) and anything that might tax immersion (mid-battle repair), early Ancient Zoidian civilization seemed like a great place to start.

Next up, I'll talk about the issue of healing non-organic creatures and healing in general with an in-depth look at Whisper's main character.