Here it is,
Sega's version of
Nintendo's
Super Smash Brothers with its classic
Sonic the Hedgehog characters. The game was known as
Sonic Championship in the
USA and was called
Sonic the Fighters in
Japan. It was released in 1996 to the arcades.
Perhaps Sonic's most unusual genre-bending, Sonic Championship was designed by Sega's premiere arcade R&D department -- AM2 -- as a somewhat simpler and more animated take on their standard 3D fighting formula. Sega was trying to draw in gamers who weren't fighting game fanatics, such as women and children. Like most Sega fighters of the day, the game implemented a simple three-button attack system: Punch, Kick, and Guard, with all other moves being combos of these three. Noticably, there is no "Defend" button. Each character has shield Barriers. These Barriers can be broken with special moves (similar to the Fighting Vipers armor system). Once all Barriers are broken, that character can't block attacks again until the next round.
Although it got a fairly wide release in Japan, Sonic Championship was very minimally received in USA arcades. It almost didn't make it over at all, because Sega of America was at the peak of their utter stupidity phase at the time, and they thought the game was "too violent" to be associated with Sonic. Might not as well have, as you'd be hard pressed to find a machine at even the most elite of arcades. A Sega Saturn conversion was long planned, but never came to be. It looks pretty hopeless by this point that the game will see the light of day as a home version.
It's possible to get remotely aquainted with Sonic Championship's fighting style through Fighters Megamix on the Sega Saturn. After completing the "Muscle" round, Bark the Polar Bear and Bean the Dynamite Duck become playable characters. The gameplay is similar to Virtua Fighter, only on a much simpler level. Combos aren't as complex or flashy, and hand-to-hand combat is easier in general (It should also be noted that the characters can literally run up walls).
Playable characters in the game include:
Info from http://www.sonichq.org/games/index/championship/ and Triften