These two features were staples in Gen VI and Gen VII respectively, with Mega Evolutions actually carrying over into Gen VII on top of Z-Moves. Now, they’re being replaced with Dynamaxing.
For those just catching up with the latest Pokemon Sword and Shield news, Dynamaxing is where a select Pokemon becomes gigantic and more powerful. Unlike straight up Mega Evolution, though, the Pokemon’s moveset also changes, and the state only lasts for three turns in a battle.
Masuda didn’t necessarily say why the decision was made, though many are speculating it’s related to the decision about not bringing all 1,000+ Pokemon to the Galar region.
Since Charizard’s here, that means Charmander and Charmeleon at least will be in Galar.
In a recent Famitsu interview, Masuda said the graphical upgrades required for rendering Gen VIII’s Pokemon on the Switch hardware translated to more time and effort for the development team. It was more practical to simply limit the Pokedex this time around, and it’s likely the same will happen in future installments.
Considering the number of Pokemon capable of Mega Evolving only continued to grow since Pokemon X and Y, it means chances are, there would have been quite a few cuts to the roster had Mega Evolution been left in.
Masuda also mentioned the goal for Dynamaxing is to increase strategic options and conversations about the game, since players will need to form new tactics and choose moves wisely to take advantage of the changes Dynamaxing brings.
In other words, we might be losing Z-Moves, but each Pokemon capable of Dynamaxing essentially has 2 full movesets for players to tinker with and learn, hence the decision to make it the main focus.
It’s worth noting as well that while not all Pokemon can make it to Galar, they can still be brought to Pokemon Home, and Masuda said plans are underway to ensure players can still interact with and play some kind of games via Home and the Pokemon therein.