I must have missed something but I guess it's also to help KH not to look to realistic because of Unreal Engine 4?

Nomura: For Kingdom Hearts III you may notice there is a technique called “shader”. Using this tool, restriction of characters have been definitely changed, and the texture which is to be put on the surface of the model has been used to describe the Disney characters and to make it similar to the Disney characters that people are familiar with. For Kingdom Hearts III, we will use a different “shader” for different worlds, so it would look natural to match these worlds.

 

Nomura: How should next-gen Kingdom Hearts be... should I go with the realism from recent works, or go with something different? I thought long and hard about several answers. From that, I knew we had to go back to our original goal for the graphics of the Kingdom Hearts characters: evoking the feel of the brush paintings in Disney works. So, I called on (Mr Takeshi) Nozue and we did test after test, and the result of all our investigating is the 'Kingdom Shader'. Because we are skipping a generation of hardware with our numbered titles, Kingdom Hearts II having been released on PS2, perhaps it will seem like we are changing things too radically. However, we are doing our utmost best to take everything you have seen so far and evolve it to be even richer.

 

So basically the kingdom shader allows them to make the characters look more like how they do in the respective Disney movies.

it's pretty much a buzz phrase. 

 

it just means that in KH3, characters will have better shading so that they don't stand out in contrast to whatever Disney world they're currently in. 

 

in KH2, the PotC world had no shading for Sora and co. and they looked extremely out of place compared to the other characters. 

 

they're aiming to fix that sort of issue by actually applying shading to the characters. 

Thank you guys:)