Back in the mid 90s Sega Technical Institute was developing a 3D Sonic game for the Sega Saturn entitled Sonic X-treme. Initially scheduled for a holiday 1996 release, the game was eventually cancelled following a flurry of development issues. Yet some dedicated fans at SonicRetro managed to acquire the source code for the original demo and have polished it up to a playable build that you can download today.
Bear in mind that this is taken from an early build where rings couldn't be collected. So far the Sonic X-treme demo only covers one level, but more stages are expected to come based on the recovered files.
In order to get the game to run on modern hardware, the Sonic fans behind this had to tweak the engine a bit. "We would also like you to know that this is an almost as is port of the engine," the developers explained. "A snapshot in time if you will."
This playable build consists of a jungle level shown off during an E3 1996 promo reel.
Sonic X-treme was originally going to be a 2D sidescroller on the Sega Mega Drive, but it then transitioned into what was going to be Sonic's first fully 3D debut. It then switched between various developers and engines before some of its coders fell ill and the game was ultimately canned in early 1997.
Here's a video of how it looks in action followed by another video of Sonic fan ptoponline detailing the origins of this long-lost and ultimately abandoned project.