Mating (PS3 / 360)
Once your Chao is an adult, it becomes fertile; this means it can mate with other adult Chao to produce a new egg. However, adult Chao can not mate at all times. In order to mate, the adult Chao must be in its mating season.
Please note that Chaos Chao and Character Chao can never mate. This is because they are immortal, and have no need to reproduce. For this reason, you should think very carefully before creating a Chaos Chao; only do so if you are sure you won't want to breed it.
The natural mating season occurs after the Chao is approximately two years old, or three to five hours after it evolves. You will be able to tell when your Chao is in its mating season, as it will sit down on the ground and a ring of beautiful flowers will bloom around it. This means that it is ready and willing to mate.
If you do not want to wait for your Chao's natural mating season, then you can use a special fertility fruit instead. The Black Market sells a fruit called the Heart Fruit. If you feed this completely to your Chao, the last bite will immediately trigger your Chao's mating season! Using this fruit, you can breed your Chao as many times as you want, whenever you want.
As you'd expect, breeding requires two Chao to mate. At least one of the Chao must be in its mating season, with flowers blooming around it. The other one must at least be close to a mating season; if it isn't in the mood, then it will refuse to mate with the other Chao. If both Chao are in their mating seasons, then they will definitely be willing to mate. The easiest way to mate two Chao is to just feed them both a Heart Fruit.
It is possible for Chao to breed on their own, if you wait long enough. However, you usually have a specific pairing in mind, and therefore want to control the interaction. To specifically breed two Chao together, just pick one of them up and place it next to the other. If only one of the Chao has flowers blooming around it, then you must pick the other one up and place it in the ring of flowers. If both Chao are willing, they will then mate.
A small ritual takes place when two Chao mate. Special music will play, and the two Chao will nuzzle each other and dance around on the flowers. After a few seconds, a brand new egg will appear between the two Chao. Congratulations! After creating a new egg, the two Chao will lose any interest in mating further. If you want to breed them again, then you will need to use Heart Fruits, or wait a very long time for another natural mating season.
The new egg will contain a new Chao, the offspring of the two parents. This is where there the PS3 and Xbox 360 versions work differently compared to the GameCube and PC games. Unlike in those other games, it doesn't seem possible to cross traits in the PS3 and Xbox 360 versions. The child will have exactly the first parent's breed, or exactly the second parent's breed; it will never be a combination of both parents.
For example, breeding a Two-Tone Normal with a Mono-Tone Blue can only result in a Two-Tone Normal or Mono-Tone Blue child. It is impossible to get a Two-Tone Blue or a Mono-Tone Normal result, unlike on other games. This is why many well-known breeds are unobtainable on the PS3 and Xbox 360 versions, as mentioned on the PS3/360 breeds page.
Unfortunately, little research has been done on the PS3 and Xbox 360 versions at this time, so we can't say for this sure. If you have Sonic Adventure DX on the PS3 or Xbox 360, then you are welcome to help us out! You can contribute information by posting in our Chao Island Contributions discussion board.