Firstly, in the ending they are home on the surface playing.
Secondly they did not die. As it shows them playing in the skys it means they had to live. This is clarified by spyros name not being entered in the book of dragons or whatever.
They should have had it that spyro and cynder did die, but they were pushed back onto the surface of the planet and into life for their heroic deeds or soemthing, as that is the usual way it is done and is not totally out of place afterall this game rips elements from like 100s of other games.
Secondly, a new planet was ment to be forming, yet the whole planet was falling appart. Was I the only one who thought that the guys got the affect wrong? Normaly with those planet rebirth plots, the whole planet turns into a fiery or destroyed rune, from which a new world would be born. However here they had the planet fall appart, which means there is no mass to form a new planet from. Unless the broken up sky world was the world that he was after creating, which I dought.
Also if you listen to it, it was meant to have happened more than once in the past, however it was only this time it was stopped. Atleast that is what the dialogue pointed towards which makes sense as if the world is destroyed, there would exist no record of other dragons doing so in the past which is logical. Which means new planets must have been reforming which was poorly shown by the fall appart thing.
The getting rid of the final boss definatly needed work, as it was meant to be a powerful dragon, yes he was destroyed in like 10 secs of cutscene. FF bosses atleast took 20 secs or more to be fully destroyed, and as this was such a major thing it should have atleast been a minute.
What will spyro do next? Is it not obvious already. Spyro and cynder will return for another game with sparx and maybe some new elemental dragon (probably female as that would be the easiest plot twist to use as cynder would be fighting over spyro with her and probably turn evil again) to stop the nasty purple dragon (who name escapes me) from comming to life again by escaping the crystle. Ignitus will have some kind of role in it as he was given a job in the ending as well as that voice actor is one of the main reasons people buy the series. This will obviously result in atmost 2 more games with the dragon pair in their current age state afterwhich I recon they will try full adult form spyro out or atleast an even more mature version.
In atmost 5 games time ( 2 as current and 3 as older), they will probably redevelop the series with an entire new generation as the series would become harder to squeeze any more games out of than the orignal.