Art by Richard Elson.
The Haunted Zone is the current name of a ghost town on Mobius. People tell stories about the Zone, with rumours saying that "ghosties and goblins" come out to play every year on Hallowe'en. Formerly a prosperous frontier town that held the biggest gold mine on Mobius, the Zone was suddenly cursed when prospectors dug into an ancient burial ground. People took little heed of the stories, until the friend of one ghost hunter disappeared into thin air. Since then, hardly anyone visits the area, especially not at night and definitely not at Hallowe'en.
For years, Sonic the Hedgehog promised himself that he would spent the night in the Haunted Zone at Hallowe'en one year and did so in 1998 with Tails in tow. Unfortunately, the curse took hold of Sonic and forced him to attack his best friend. Soon after, the murky inhabitants of the Zone's Underworld surfaced and presented Sonic with the Charm of Despair, an amulet capable of pulling Sonic from the living world forever. The army turned on Tails, but the fox flew to one of the town's high points to think. Before midnight, Tails managed to pull the amulet off his friend and saved Sonic from the Underworld. With Hallowe'en over, the town returned to just being a creepy town, and Sonic was none the wiser to its dark secrets.