According to TSSZ News, back in 2006 there was a series of blog posts from someone who claimed they worked within the industry. In Early 2007 he made a post discussing the next-generation instalment of NiGHTS, and how he didn't have much faith in the game - with claims he knew Sonic Team personally.
Shortly after his posts were removed, however as many will know - once something has been posted publically online it's hard to have it completely removed. An archived copy of the page reveals that the blogger had some link to Sega, and a strong one at that. At the end of the post (dated March 2007), he left a hint of things to come from the studio:
another Sonic game with a transforming Evil 'Night' Sonic who looks like a werewolf and can stretch his arms out Dhalsim-style. It will happen, mark my words.
Now over a year later, we've got Sonic Unleashed - exactly as described. Internet sleuths have found that the blogger is infact Ben Andac, who previously worked as Game Evaluator for Sega and Sony Europe. With that in mind it confirms the authenticity of his comments made on NiGHTS. Andac had played build of the game for Xbox 360, but with the success of the Wii Sega Japan had forced Sonic Team to rebuild the game for Nintendo's less powerful system - something which both the staff and producer Takashi Iizuka hadn't been happy about.
There's no doubt that Sonic Team have lost their quality touch. They are worse than talentless: they are without passion. Bored, weary, closed-minded and out of touch with any sense of what makes games good anymore.
This could perhaps explain the poor production values and reception for Journey of Dreams... Do you think Sonic Team should work on different franchises; or at least spend longer on Sega's beloved hedgehog?
Thanks to NeoGAF's Mama Robotnik.