G2 Ponies refers to the Second Generation ofMy Little Ponytoys. Production of the G2 line began in 1997, but due to its limited popularity, it was discontinued in the US in 1998. The line was more popular in Europe and continued to be produced there until 2003.
The G2 ponies were quite different than the First Generation G1 ponies. Their bodies were slimmer and their faces were smaller, more similar to the Sweetheart Sister ponies from the G1 line. They also had rhinestone eyes.
It's interesting to note that the G2 line consists almost entirely of earth ponies, with very few unicorn or pegasus ponies. The few pegasus ponies that were included were actually earth ponies with clip-on wings.
G2 ponies tend to be less popular with collectors, perhaps because their appearance was so much different than the beloved G1 ponies children and collectors originally fell in love with.