I might expand on this someday but basically, they reside in an alleged "special" version of sonic 1. released in November of 1994, a month after s3k.

They do not kill their victims, they however turn them into powerful beings in exchange of losing control over themselves (ex. Knuckles is given great power but loses control over himself).

The moment you play their game, you may not quit, nor unplug the console. I think.

Reports say that players who finish said game experience hallucinations, nightmares and intrusive thoughts of ending their lives for the beast that is Son1c.

A few remnants of the game remain, but they are very hard to find.

The only way to beat the game without finishing it so break the console.

Despite being an all powerful being (not god), they still follow the rules of the game, so no blood and stuff like that. The best they can do is crash the game by overloading the game with too much data.