Iizuka, the Japanese team experimented with 3D computer graphics for Sonic 3, but were unable to implement them with the limited power of the Genesis. After Sonic & Knuckles was completed, Naka returned to Japan to work on Nights into Dreams (1996) with Sonic Team. At the time, Sega of America operated as an independent entity, and relations with the Japanese were not always smooth. Some of this conflict may have been caused by Sega president Hayao Nakayama and his admiration for Sega of America; according to former Sega of America CEO Tom Kalinske, some executives disliked that Nakayama appeared to favor US executives, and "a lot of the Japanese executives were maybe a little jealous, and I think some of that played into the decisions that were made". By contrast, author Steven L. Kent opined that Nakayama bullied American executives and believed the Japanese executives made the best decisions. According to Hector, after the release of the Sony PlayStation in 1994, the atmosphere at Sega became political, with "lots of finger-pointing". Development After Naka's return to Japan with his team in late 1994, STI was left with mostly American staff. Early ideas for the next Sonic game included the experimental Sonic Crackers, which became the 32X game Knuckles' Chaotix (1995). Another concept came from STI head Roger Hector, who wanted to develop a game based on the Saturday morning Sonic the Hedgehog cartoon, and took Sonic Team and STI developers to DiC Animation's studios in Burbank, California after the release of Sonic Spinball to demonstrate his idea. STI developer Peter Morawiec designed gameplay from this concept as a side-scrolling video game with more focus on story than previous Sonic games. He called the pitch Sonic-16, intended for release on the Genesis. However, Sega management was not interested in a spin-off and disapproved of the idea as too slow for Sonic's speed. Instead, Morawiec moved on to work on Comix Zone (1995). Development of Sonic X-treme began in late 1994 at STI. Michael Kosaka was executive producer and team leader, and designer and CGI artist Senn created animations to pitch the game to Sega executives. As new consoles and the 32-bit era were on the way, the game was moved to the 32X under the working titles Sonic 32X and Sonic Mars after the "Project Mars" codename used for the 32X. The initial 32X design was an isometric side-scroller, but