These levels used shading, transparency, and lighting effects to showcase the Saturn's technical potential.

Boss battles were set in open, arena-style levels, and the bosses were rendered in polygons instead of sprites. Sonic was also able to enter and exit the screen as he moved. Levels would rotate around a fixed center of gravity, meaning Sonic could run up walls, arriving at what was previously the ceiling. X-treme featured a fisheye camera system, the 'Reflex Lens', that gave players a wide-angle view, making levels appear to move around Sonic. Gameplay was similar to the Sega Saturn platform game Bug! (1995), though producer Mike Wallis said that X-treme differed in that Sonic was free to roam levels, unconstrained by linear paths. It would have been the first Sonic the Hedgehog game to feature 3D gameplay, predating Sonic Adventure (1998). Sonic X-treme was a platform game in which players controlled Sonic the Hedgehog from a third-person perspective.

Premise 'Jade Gully Zone' from Senn and Alon's engine (see Game engines), which used a fish-eye style view known as the 'Reflex Lens' Elements similar to those in X-treme appeared in later games, such as Sonic Lost World (2013). The cancellation is considered an important factor in the Saturn's commercial failure, as it left the system with no original Sonic platform game. In place of X-treme, Sega released a port of the Genesis game Sonic 3D Blast, but did not release an original 3D Sonic platform game until Sonic Adventure for the Dreamcast in 1998. A film tie-in with Metro-Goldwyn-Mayer was also canceled. Amid increasing pressure and declining morale, designer Chris Senn and programmer Chris Coffin became ill, prompting producer Mike Wallis to cancel the game. The plan was disrupted by company politics, an unfavorable visit by Japanese Sega executives, and obstacles with the game engines planned for use, including one from Sonic Team for Nights into Dreams (1996). Development shifted to the 32X and then the Saturn and Windows, and the game was redesigned as a 3D platform game for the 1996 holiday season. X-treme was conceived as a side-scrolling platform game for the Sega Genesis to succeed Sonic & Knuckles (1994). X-treme featured open levels rotating around a fixed center of gravity and, like previous Sonic games, featured collectible rings and fast-paced gameplay. Robotnik from stealing six magic rings from Tiara Boobowski and her father. The storyline followed Sonic on his journey to stop Dr. It was planned as the first fully 3D Sonic the Hedgehog game, taking Sonic into the 3D era of video games, and the first original Sonic game for the Sega Saturn. Sonic X-treme was a platform game developed by Sega Technical Institute from 1994 until its cancellation in 1996.

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