Gameplay is similar, Sonic collects rings while avoiding obstacles, but is paced extremely slower as the 8-bit version focuses more on exploration.

[4] As in the original, the anthropomorphic hedgehog Sonic ventures to rescue the animal population of South Island from the diabolical Doctor Robotnik, who plots to turn them into robots.

[5] The player jumps between platforms, avoids enemy and inanimate obstacles, and breaks televisions to collect shields, speed shoes, and invincibility, and mark checkpoints.

[b][5] The player starts the game with three lives[8]: 12  and will lose one if they are hit without carrying any rings,[5] drown, fall into a bottomless pit, or reach the act's 10-minute time limit.

[4][8]: 10 The game ends prematurely when all lives are lost, although the player can return to the beginning of the current act if they have any continues.

[13] As a result, a general manager,[c] whom Koshiro met while working on The Revenge of Shinobi, asked him to start developing a Game Gear version of Sonic.

The 8-bit Sonic was created specifically for the Game Gear, but Sega also had Ancient develop a version for the Master System, which was selling well and had similar hardware.

He converted Masato Nakamura's 16-bit Sonic score to the 8-bit programmable sound generator to start, but ended up using only three of those tracks; the remainder of the music is Koshiro's work.

[12] In Europe, the game was built into later versions of the Master System,[9][16] while in North America, it was the console's swan song.

The Master System had failed to gain a foothold in North America, so its version of Sonic became a collector's item.

[20] Sega released the Master System version for the Wii's Virtual Console digital distribution service in Japan and North America in August 2008, and in Europe the following month.

[24][6] The game's level variety and designs, the action-packed and addictive gameplay, and sound and visual quality—thought to be on par with the original version's—were commonly highlighted.

[5] Reviewers criticized the relatively low difficulty and short length, although Computer and Video Games (CVG) wrote these were also problems in the original[7] and Go!

[26] However, most found the problems did not detract from the experience;[6][7][24] CVG wrote that the game still offered the player plenty and was just as good as the Genesis version.

[3][4][16] IGN wrote that although it was not as visually appealing, fast, or ambitious as its 16-bit predecessor, the 8-bit Sonic the Hedgehog was still a competent game in its own right, with unique level designs that managed to retain the feel of the original.