After development of the first game, Nintendo was considering developing a sequel with the working title 'Wind Waker 2'. According to producer Eiji Aonuma, the demand for a more Ocarina like game with Zelda made them reconsider the idea. Artist Satoru Takizawa stated The game would've been set on land rather than at sea.

"To tell you the truth, we had begun the initial steps towards creating Wind Waker 2 around that time. However, demand for a more Ocarina-like game was growing by the day. We did our very best with Wind Waker, and put everything we had into it…
However, Wind Waker 2 would have taken place in a more land-based setting, rather than on the sea, so that we could have Link gallop across the land on a horse.

But Link’s proportions in Wind Waker weren’t very well suited for riding on horseback, he was too short, and an adult version of Toon Link did not seem appropriate either. So, while we were stuck on those problems, we became aware of the greater demand for a more realistic, taller Link. High-budget live-action fantasy movies were also huge at the time, so with all things considered, we decided to have at it. I was on board with the project as art director, and started off by bringing [Yusuke] Nakano on to do the design for Link."