IGN Retro had an article about Sonic X-treme. Really good read...

http://retro.ign.com/articles/877/877660p1.html

As a kid i obviously did not know whats going on with Sega internally, but I was always really sad there was no good Sonic games for my Saturn. So I find things like this really interesting to read...its like finding out why your dad left you when you were a baby :)

Some highlights - From the way things sound below, it almost seems that Yuji Naka is partly responsible for the downfall of the company.

"When Yuji Naka visited STI to see what they were doing with the franchise he helped build, he simply said, "Good luck." The rivalry between SEGA of America and SEGA of Japan would continue to strain the development until its eventual cancellation. "

"When Sonic Team leader (and NiGHTS programmer) Yuji Naka got wind that his code and tools were being lent to STI, he was furious. Sonic Team had an uneasy rivalry with STI, and Naka was protective of work. He put down an ultimatum: Take back the code and tools, or say goodbye to Yuji Naka. SEGA obliged, and X-Treme was cost valuable weeks of development at the worst possible time."
 

"A few months after X-Treme's cancellation, Sonic Team released Sonic Jam, a compilation that featured a playable 3D Sonic stage. That 3D level never became a full game, but it did serve as a big middle finger to STI. It was Naka proclaiming, "We could have done it if we wanted to."

"SEGA themselves are hardly even the same company they once were, and Yuji Naka seems to have left for good this time. Much of Sonic X-Treme's staff remains reclusive. For them, the ordeal remains a painful memory of unimaginable stress, pressure, and ultimate disappointment."

Thanks man, great read. I really like Sega. This article reminded me that I am planning to buy a Saturn this summer :D Grew up with the 64.

Edit- Wouldn't it be easy for Sonic Team to finish the "fisheye" Sonic X-treme and release it as a WiiWare title? They could say it was a cancelled Saturn game reurectted or something... I dunno... Will Sonic X-treme ever see the light of day?

Regardless, I think Sonic's future is looking up. I always thought 2.5D with those fast 3-d segments (like parts of city escape in SA2) would work best for Sonic. Sonic rivals had dabbled with the idea, and it looks like sonic unleasehed will really get it to work. Sonic Chronicles the dark brotherhood also looks good; these two games could really give Sonic a statues boost! 

I'm not sure who owns the rights to Sonic Xtreme anymore. People who made it or Sega. Sonic Team had nothing to do with that game...but they didn't have much to do with Sonic 2 either. It would be amazing to play Sonic Xtreeme even in the unfinished state its in.

I agree that Sonic finally has our attention with Sonic Unleashed. Sega really needs to draw upon its old franchises at this point... I'd love to see Xbox live versions Vectorman - Streets of Rage in HD, Panzer Dragoon for the PS360 would be nice, Shenmue on the wii is buzzing around...

This may sound bad but if you do get the Saturn make sure to mod it. All the games worth playing are 100's of dollars... No one is losing money on saturn software sales anymore if you do make backups.

Yuji Naka had nothing to do with turning Sega into an almost-shovelware exclusive game development company. His new company, Prope, has not announce any games which means that he is trying to make a great game and not shovelware like SEGA do

Well him and his ego certanly had something to do with that game being canceled...and canceling Sonic in 1996 is like canceling GAT4 today.

Also, while sega games are far from great as they once were they are far from shovelware. They usuallty average between 65 to 75 on metacritic.

*hypothetical* Sonic X-treme comes out, 3-5Million higher Saturn sales as Sonic?genisis fans clamor for the game and buy blind. This is enough of a boost so that Saturn gets 3rd party support and rides out the generation. Sega Still makes Dreamcast, but it comes out a year later and has the power Sega wanted- pretty much the same as the PS2. Also let's say they included a DVD player. Gamecube would come out a year later, being the most powerful, and the PS1 gen would bascailly repeat. Except I think Sony would do worse due to Dreamcast also offering DVD's, and all 3 systems would likely share game ports, and may be it would have been 50/30/20 PS2/GC/Dreamcast split. That's best case scenario by far, but I do concur that having Sonic X-treme be cancelled crippled Saturn.

Hey, not bad. That article does a good job of highlighting some of the horrible internal struggles taking place in 1995 between Sega of Japan and Sega of America. But if you want the FULL story of why the Saturn crashed and burned so badly, I have to direct you to the masterful history written by Sam Pettus:

http://vgrebirth.org/articles/segabase.asp

Be warned that these are Malstrom-length articles on the history of Sega. Not for the faint of heart. But you'll end up learning more about Sega than you ever imagined.

You forgot the Xbox in the scenario. Ofcourse Xbox may have not entered the consle business if Sega was a strong player.

I disagree that Canceling Sonic X-treme
was like cancelling GTA4... ps360 would have been ok. it's more like this hypothtical...


Let's say the Wii's strategy failed and casuals didn't bite and only hardcore Nintendo fans like me (though I don't like the Wii any more than I liked GC) bought the system. Wii is trailing like Patcher predicted. Now let's say that Shigeru Miyamoto has developed the Super Mario Galaxy engine and the game is 25% done and it is Febraury 2007. Laucnh is over and Wii is starting to falter. Brawl has been rushed as a launch titel and gets 8.5/10 reviews for been "the same as melee" so Galazy is Wii's only big 07 gun. Now let's say the guys working on Animal Crossing steal Miyamoto's galaxy engine in order to make a 3-d animal crossing world (yes I know Miyamoto didn't really make the engine this is hypothetical) and Miyamoto gets mad and says "Galaxy and my engine go or I go to Sony" and Nintendo lets Galaxy go. Wii is crippled and put into a tailspin. Thats sorta what Sonic- Xtreme did to Sega imo

Imagine if Miyamoto was whining that Hudson was using some of the assets of Super Mario 64 to make Mario Party. Yamaguchi would have figuratively smacked him down, and if Iwata were in charge then, he wouldn't have stood for it either, mainly because Nintendo has been using shared assets as a great way to keep budgets down (why Link's Crossbow Training costs just $20 with the Zapper).

Too bad Sega couldn't learn from that.