This is a Didj game.
The Didj is a "learning game" console type system that only plays it's own proprietary games, all of which are somehow educational. The Didj is some sort of off-shoot of the Leap Frog system (a plastic system also full of its own learning games for little kids) though it is more sophisticated.
This game has Sonic teaching spelling in English for anyone who is age 7 to 10. It uses Sonic Adventure style graphics, but a Green Hill type background for the cover and adds a strange small ring to Sonic's finger. How does it play? Possibly like the (now ancient) Mario Teaches typing, only you're spelling things in order to get Sonic to do stuff.
However, the graphics inside are Genisis style (not Sonic Adventure like the cover) and one of the levels looks like Aquatic City. This is currently out in 2008 and can be found in Target and other stores in the USA.