Homefront was THQ's aspirations to make a stake into modern military FPSes -- the now defunct publisher's own Call of Duty or Battlefield, so to speak. Unfortunately, Kaos Studio, formed out of a Desert Combat mod team, just couldn't deliver something that was quite the caliber that THQ was hoping and expecting for. Homefront sold 2.6 million copies in its first two months, which was apparently enough copies to inspire THQ to seek out Crytek to develop a sequel.
Since then, THQ has gone under. Crytek bid and won the Homefront IP. With complete creative freedom, Crytek is changing the sequel up. The original was a linear shooter in the same vein as Call of Duty. Crytek ultimately decided to change Homefront into something more open world. "When we acquired the IP, all of a sudden we had the freedom to take this game wherever we wanted," stated Crytek designer Fasahat Salim to Polygon. "We thought, what better way to do that than just go open-world with it."
Homefront: The Revolution will be set in Philadelphia. Due to the open world nature of the game, players are pushed towards using stealth and whatever tactical means possible to take down enemies, rather than facing them with full force. Players seek out the citizens of Philadelphia for help, as angry mobs can provide cover and delay enemy forces.
In short, the open world nature of the Homefront sequel lends itself well to establishing the "conquered America" setting.