This is a disk launcher toy. When you use the handle, it will propell (or possibly roll) the flat plastic disks with curled/rolling Sonic graphic. The launcher itself is sort of Sonic head-shaped, with odd spikes and silver front. Sonic X jumping punch Sonic graphic takes up a wedge of space on the device. This is thought to have been a fast-food promo toy. 

Disk Spinners:
This Disk Spinner is part of a set of McDonald's meal prizes.
-" They were part of a promotional event for Sonic X at McDonalds, around 2008-2009 (of all years)
- There are more characters, Tails, Knuckles and Shadow.
- The disk launchers would be themed to the respective characters (yellow with silver highlights, red with green highlights and black with red highlights), even down to the shape of the launcher.
- Each toy came with only three disks (as already pictured), obviously themed to the characters.
- Yes, they propell. Things were like bloody cannons."
Info Added by: Polkadi~
If you have photos of any of the missing launchers, you can send them in for credit here on Gear.