The Hedgehog Engine is a graphics engine, and has no bearings on gameplay style. It is only compatible with the Wii U, PS3, Xbox 360, and PC because the Wii's and Nintendo 3DS's hardware isn't powerful enough to handle its next-gen lighting and visual effects. The engine is not to be confused with Havok, which is related to certain physics tasks, or Sonic Team's in-house engine used for gameplay. Hedgehog Engine is also used in the game Sonic Generations. Sonic Generations was in development for two years from 2009.
As well as featuring camera position changes and a blend of classic elements from other Sonic games, the Hedgehog Engine also uses a revolutionary new piece of technology. This was called the "light-field", which can create CGI quality graphics in the in-game graphics system. The basic concept of the Light-field is that light bounces off every single thing on screen, creating an ultra realistic look on the area around. Also, not only did the graphics around Sonic change, but so did Sonic's model. Light is reflected off of him too, to make sure that he didn't look "out of place" as many reviewers would claim from past Sonic games. This was the longest part of the Hedgehog Engine to make, taking three years to develop.
Features of the Hedgehog Engine include:
Pre-Baked Global Illumination (GI)
GI Generated Textures
Post Processed HDR Bloom
Eye adaptaion & HDR lighting
Color grading and tone mapping
Light-field character illumintation
Motion blur & depth of field
The engine is obviously named after Sonic's species, the hedgehog.