So it's saying Sega can't handle thier own mascot like they used to?
I don't think it's so much that, more that they just don't care, as Shell talked about.
I recall an old developer rant, taken down because it allegedly spoiled Unleashed before it was even announced, about how Sonic Team has been reduced to a rushed yearly cash-cowing house with no passion left for what they're doing. I don't think that's too far from the truth. Many times they land a solid concept. But either because they have a deadline or because they just don't care, their projects virtually never get the fine-tuning in gameplay that they need.
Having read this same rant on GAF many moons ago, I would agree that's pretty much the truth. Between the devs being hard pressed to give two shits, and the Sonic fan base buying games, regardless of the quality? Sega hasn't had good reason to improve, if the public has made no real "demand".
I'm interested in seeing what Project Needlemouse is all about. But unless Sega/Sonic Team/whatever dev is involved, is actually interested in making a quality game? Things won't get better. There are a lot of fundamental probs with Sonic as a series now, and it goes far beyond the scope of how "super forms in levels" has not been a feature in the games in over 15 years. (Sorry, Shell.

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I would say more accurately Sonic Team. Remember NiGHTS: Journey of Dreams?
JoD was not exactly a shining example of how to make a great game, any more than Billy Hatcher was, but I don't think either game could be construed as scraping the bottom of the barrel of game design, as some of Sonic's last few games.
Sonic has been basically reduced to more than a ho that Sega expects to turn tricks, and "go out make some muthafuckin' money!" [/Butters] And that's sad, considering that, at least in Europe and the US, Sonic was definitely Mario's rival. But now, more than ever, the differences between the franchises has been made apparent.
Mario, as a franchise, as built, from the ground-up, as a means to help craft games. There was little to no "marketing appeal" that was at the center, so much that it was all a part of Miyamoto's functional design.
Sonic, on the other hand, was built as a franchise that was meant to cater to 90s marketing. The character himself was "radical, hip, edgy and cool". Sonic was practically the "Poochy" of his day. Possibly the only reason we even got decent games in the 90s based of him, was because of Sonic's "3 Dads", Naka, Yasuhara and Oshima, who took what marketing gave them, and (sonic-)spun it into gold.
Without those three, or at least, the same degree of fundamental thought and design those three gave the series? Is it any wonder why the series is in the pickle it's in now?