The version of Sonic X-Treme we saw in advertisements was scrapped early in development. The slow and unsatisfactory progress in porting the PC engine code to the Sega Saturn caused arguments, and resulted in the executives intervening and bringing in a third party company, POV, to take over programming duties. From then on, three parties worked on the programming separately: one on the boss stages and two on the main game. On the original programmers' side, good progress was made. But POV had no such luck. Due to a poor presentation made by POV, the President of Sega Japan had already angrily left the building when the team of original main-game programmers arrived. In reaction to the poor presentation, the president demanded that the rest of the game be made like the boss engine, which caused further complications and ultimately the cancellation of the game.

Due to the stress involved with the game's production, Director Chris Senn actually grew physically ill, stating that he "took on far more than was healthy... and after 2 years I became extremely ill... a nurse told me he thought I had 6 months to live, actually. I lost 25 pounds, was sick all the time, had cramps... and still went in to work... all due to too much stress."

There is a fan recreation of Sonic X-Treme under the name Project AXSX. It is planned to be a complete recreation of Sonic X-Treme, and runs on the fan made Sonic GDK engine.

There was originally a character in the game called Tiara Boobowski, but due to the game being cancelled she didn't make her debut.

Ian Flynn had stated on several occasions that, had he been given the go-ahead, he would have liked to incorporate Tiara and Gazebo Boobowski from the cancelled Sonix X-treme into the Archie Sonic comics, which were still ongoing at the time. However, during a Q&A from before the comic's cancellation, he confirmed that they would never appear in the comics, and could not disclose the legal reasons why.

Despite this, prior to Ian joining the team behind the Archie Sonic comics, Tiara did make two cameo appearances: first in Issue #134, where she was in the audience as Sonic and sally broke up, then in issue 138 as a waitress working at Uncle Chuck's diner (note that she has blonde hair and a purple top in this appearance).

Relations between Sega and its various regional offices, particularly Sega of America, have been rather tumultuous throughout the company's history. This is perhaps most notable during the development of Sonic X-treme, where the conflict between the two played a major role in the game's eventual cancellation. Supposedly, some of this conflict originates from the 1990s due to former president Hayao Nakayama's admiration of Sega of America. According to former Sega of America CEO Tom Kalinske:


However, video game journalist Steven L. Kent has made claims to the contrary. According to him, Nakayama essentially bullied the American executives under the belief that the Japanese executives were the ones who made the best decisions. When asked if communication between the two was really that bad, he said: