>>279603573
People say it's because of his design or whatever, but that's not true. Sonic's design was actually perfect for the Japanese market, a balance of mascot cuteness and shonen manga coolness, he was designed to appeal to Japan more so than the US.
The real issue is the same reason why Dragon Quest never took off in the West - they fucked up the original release. It didn't come bundled with the Genesis in Japan, the Genesis itself wasn't selling nearly as well as it did in the US, and the ad campaign wasn't nearly as strong as the absolute genius Sega of America pulled. So Sonic didn't become a household name. Saturn was the first Sega console that actually succeeded in Japan, and the only two Sonic games on that console were Sonic R (lmao) and Sonic 3D Blast (which didn't even release in Japan).
By the time Sonic Adventure was released, Sonic's moment to shine had long passed in Japan. To this day, he has a following there, it's not like no one knows what Sonic is, but he's nowhere near the level of big mascots like Mario, Pikachu, or Hello Kitty.