After the destruction of the Death Egg, Robotnik has begun work on the Death Egg II. Tails is warned about the ship by a robot friend of his, and constructs a spaceship to go after Death Egg II. But there's something wrong: In order for the spaceship to work, it needs the power of the eight (yes, eight) Chaos Emeralds, and only one person can fit inside the ship itself.
The Emeralds are scattered around the planet, each one having a "guardian". The guardians just happen to be the characters that you play as in the game: Sonic the Hedgehog, Miles "Tails" Prower, Knuckles the Echidna, Amy Rose Hedgehog, Nack the Weasel, Espio the Chameleon, and two new characters: Bark the Polarbear and Bean the Dynamite.
Sonic and Tails meet with Knuckles on the Floating Island to decide what to do. Knuckles suggests that since there's only room for one on the spaceship, the strongest should go. He decides he's the best choice and asks Sonic for his Emerald. Sonic, not fond of Knuckles' decision, begins to start a fight. Tails breaks the fight up with an idea: they would have a tournament to decide which guardian was the strongest.
There are nine areas to fight in in the game. You have to beat the guardian of each Emerald in order to be reconized as the strongest to go after the Death Egg II.
I have yet to play this game.