Golden Age Mike Wallis, who had previously worked on STI titles like The Ooze and Comix Zone, was brought on as producer, and the staff was expanded. 32X was dead in the water by mid-1995, and the Saturn would need the hedgehog to help it get ahead.

SEGA moved the project to their new 3D nVidia-based hardware, in the hopes of making it a launch title, before SEGA of Japan dropped the late-term bomb that they would be pushing the Saturn exclusively. Over the next few months the concept team pushed ahead, but constant changes kept real development from getting very far. 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. Early versions of Sonic Mars played with the idea of an isometric view, and a 2.5D side-scroller, but eventually settled on a 3D view set on a floating plane. Ideas about how to make the transition differed wildly. Platform games were the most popular genre at the time and the most difficult to bring into 3D. It was fast becoming apparent that the whole industry was going 3D, and companies all over the world were scrambling to rethink 2D's most popular genres in new dimensions. The title was first pitched as another Genesis side-scroller, but was soon moved to the 32X, under the codename 'Sonic Mars.' Sonic Mars Everyone knew that the next Sonic would have to be a step in a different direction, but there was a lot of uncertainty about what that direction would be. SEGA Technical Institute, the US-based team behind most of Sonic's Genesis games, was assigned the weighty task. The public didn't get to see much of the project's earliest days. Sonic X-Treme would have to grace all these systems at one point or another, and it was just one sign of the turmoil SEGA was in.

SEGA of America was placing their bets that budget-conscious Genesis owners would upgrade to 32X, and when that didn't pan out, they hoped to make a cartridge-based system with nVidia-licensed 3D hardware to compete with the Nintendo 64.

SEGA of Japan was pushing a CD-based 2D powerhouse called the Saturn. SEGA was having a great deal of trouble deciding where to go with their next generation of hardware. There was the experimental multiplayer Sonic Crackers, eventually to become Knuckles Chaotix there was the nebulous next-gen reimagining that was X-Treme and eventually, there was their backup plan, the outsourced Sonic 3D Blast. Like a good fisherman, SEGA kept several lines in the water. The fourth game in the flagship Genesis series was a success, but SEGA was looking to push their mascot in a new direction - it just wasn't sure what that direction was. The project began, predictably enough, after the completion of Sonic & Knuckles in late 1994.

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