The story takes place after Sonic 3&k. During this time, Sonic and Tails have gone on many adventures that we'll never get to see. Eggman, for his newest plan, found an uncharted deserted island with no living inhabitans. He desides to stop using animals for robots because he sees it as a "waste of time". Now, with Eggmans new "3-phase" plan set in motion, he'll take over the world!
On the other hand, Sonic is currently traveling the world on foot. He left his plane "Tornado" over at Tails' workshop for repairs. While exploring, he found an island that he has never seen before. Because it's really close, he decided to get there via running on water. When he got close enough, he spots an Eggman base and decides to check it out. Eggman didn't expect for Sonic to show up early, but the doctor still had something prepared for him.
Sonic, be careful! Don't let your guard down. The fate of the world depends on it!