Actually I just remembered. What could have happened to Sonic if he failed?
He would have been replaced by Mighty the Armadillo...one of Sonic's pals from Knuckles Chaotix and "Sega Sonic Arcade" He disappeared when Sonic Heroes came out.
Yet Yuji Naka's first idea was Mighty. If you take a pciture of Sonic and Compare it to Mighty, you'd have the exact same character pretty much. (Google search: Mighty the Armadillo) The look and attiude are a dead give away