Sonic Extreme is a pitch / early proto created by Vision Scape Interactive, that was recently discovered by ProtonX (from the Assembler Forum) on a development unit for the original Xbox console. The project features Sonic skateboarding around in an area reminiscent of Heroes‘s Seaside Hill. Additionally, there appears to be a battle mode with Sonic and Shadow built in the same split-screen style as Sonic Adventure 2: Battle / Mario Kart. Probably Vision Scape Interactive tried to pitch this project to SEGA, but without luck.
Vision Scape Interactive were also working on other cancelled games:
Article by Mariosegafreak
U64 is an archive with articles, screens and videos for cancelled, beta & unseen videogames. Every change & cut creates a different gaming experience: we would like to save some documents about this evolution for curiosity, historic and artistic preservation.