The storyline followed Sonic on his journey to stop Dr. Robotnik from stealing six magic rings from Tiara Boobowski and her father.

The cancellation is considered an important factor in the Saturn's commercial failure, as it left the system with no original Sonic platform game.

(1995), though producer Mike Wallis said that X-treme differed in that Sonic was free to roam levels, unconstrained by linear paths.

[1] X-treme featured a fisheye camera system, the "Reflex Lens", that gave players a wide-angle view,[3] making levels appear to move around Sonic.

[4] Levels would rotate around a fixed center of gravity, meaning Sonic could run up walls,[5] arriving at what was previously the ceiling.

"[9] Like previous Sonic games, X-treme emphasized speed and physics, and featured special stages and collectable rings.

[10] At least four stages were developed before cancellation: Jade Gully, Red Sands, Galaxy Fortress,[5] and Crystal Frost.

Though Sonic the Hedgehog 2 was successful, the language barrier and cultural differences created a rift between the Japanese and American developers.

[14] According to developer Takashi Iizuka, the Japanese team experimented with 3D computer graphics for Sonic 3, but were unable to implement them with the limited power of the Genesis.

[7] According to Senn, "[Kosaka] and the executive producer Dean Lester were not getting along, and I believe Michael felt it was his best option to simply remove himself from what he thought was a politically unhealthy environment.

[3] STI technical director Robert Morgan was instructed to explore this possibility, without hardware specifications or development kits.

[10] After Sega announced that it would focus solely on the Saturn, development shifted again,[4] costing the team several weeks.

One team, led by Morgan and including programmer Chris Coffin, developed the free-roaming boss levels.

[8] This engine used tools used by Saturn games such as Panzer Dragoon II Zwei and rendered bosses as fully polygonal characters.

[10] Other staff included composer Howard Drossin, lead artist Ross Harris, artist/designers Fei Cheng and Andrew Probert, and designers Jason Kuo and Richard Wheeler.

According to Wallis, the game would combine 2D side-scrolling with "the ability to have [Sonic] go into and out of the screen", which created unexpected problems in implementation.

[8] Senn said a primary problem was transitioning Sonic's simple and fast controls to a 3D environment: "The simplicity of movement, particularly moving very quickly, was now gone.

[10] The executive was unimpressed by Senn and Alon's work, as the version he saw, ported from PC to Saturn by Point of View, ran at a poor frame rate.

[3] Senn, who said the visitor "came storming out practically cursing after seeing what they'd done", and Alon attempted to show their most recent PC version, but he left before they had the opportunity.

[8] Concerned about the need to create essentially a new game before the strict October 1996 deadline, Wallis isolated Coffin's team, preventing outside influence.

[3] Although neither Senn nor Alon were officially part of the production after the visit, they continued working on their version, hoping to pitch it to Sega as a PC game.

[3] In April, Sega of America executive vice president Bernie Stolar approached STI and asked what he could do to help the game meet its deadline.

At Wallis' suggestion, he provided the tools and source code for Sonic Team's 3D Saturn game Nights into Dreams.

[4] Morawiec requested that X-treme be reworked into bonus stages in 3D Blast, but Traveller's Tales was unable to properly transfer Sonic's model.

David Houghton of GamesRadar+ described the prospect of "a good 3D Sonic game" on the Saturn as a "What if..." scenario akin to dinosaurs surviving extinction.

[7] Next Generation said that X-treme would have damaged Sega's reputation if it did not compare well to competition such as Super Mario 64 and Crash Bandicoot.

Fahs wrote in 2008 that most X-treme developers were unwilling to discuss the game, as "the ordeal remain[ed] a painful memory of unimaginable stress, pressure, and ultimate disappointment".

[39] Senn created a website with development history including early footage, a playable character named Tiara, and concept music.

[2] In February 2015, the fansite Sonic Retro obtained the X-treme source code and created a playable build, featuring the level shown in the E3 1996 demo.

[40] Reviewing the build, Hardcore Gamer's writers described it as rough but inventive, lacking speed but retaining the spirit of Sonic's design.