According to humors, this is part of Niantic Labs move to counter the slowing trend of Pokemon.

Players believed that Pokemon Go Gen 2 is underway as Niantic Labs recently launched the new buddy system update to encourage gamers to continue playing.

The current Pokemon Go version comes with Generation 1 Pokemons minus Mew and Mewtwo, leaving the actual total to 149 Pokemons taken from "Gameboy" games - Pokemon Red, Blue and Yellow.

Adding Generation 2 Pokemons like Cyndaquil, Chikorita and Totodile derived from the "Pokemon Gold, Silver and Crystal"  along with Ho-oh and Lugia could make the game more exciting and probably will bolster the number of active players again.

Niantic Labs' recently released buddy system is believed to be the first step to the introduction of Generation 2 Pokemon. The buddy system was first introduced in the Generation 2 video games. It allows players to select a Pokemon that will stay outside of the PokeBall and walk beside them.

Aside from that, a report from Pokemon Go Hub claimed that the way the eggs are hatched in the latest "Pokemon Go" version was actually obtained from Generation 2 video games'.

Due to these updates, the Pokemon Go Gen 2 release rumors are somehow verified. It also gave rise to a new belief that the release of the "Pokemon Go Gen 2 " will most likely take place after the release of the 3DS version of "Pokemon Sun and Moon" in November.