It seems he's been relegated to the Sega rest home along with who knows how many characters...
Quite possibly the reason Nintendo still has a console and Sega doesn't is that Nintendo has a wide range of mascot characters - all balanced to appeal to different demographics. One look at Super Smash Bros Melee will make anyone realize that - Mario, Samus, Fox McCloud, the Pokemon, Donkey Kong, the F-Zero gang.
Sega, on the other hand, experiments with mascot characters but kills them off after one game - instead they choose to focus entirely on a single franchise: Sonic. This habit of putting all their eggs in one basket is surely ONE of the reasons their consoles following the Genesis did so poorly - Saturn didn't even HAVE a decent Sonic game, and Sonic's identity alone wasn't enough to attract the casual gamer to the Dreamcast.
If Sega balanced it's resources amongst regularly creating games featuring Burning Rangers, Sonic, NiGHTs, Samba, Super Monkey Ball, Virtua Fighter, Panzer Dragoon, Jet Set Radio, Puyo Puyo, ChuChu Rocket, Billy Hatcher, Space Channel 5, Vectorman, Ristar, Phantasy Star, and (dare I suggest it?!) Alex Kidd - we'd problably be playing the follow-up to the Dreamcast RIGHT NOW.
Putting all of their hope and dreams and cashflow squarely on the shoulders of a single blue hedgehog is no doubt what's currently slowly but surely killing them.