Sonic co-creator Yuji Naka has been arrested on charges of insider training.
Yuji Naka, the co-creator of Sonic the Hedgehog and a former head of Sonic Team, who recently released a new game, has been arrested for insider trading in Tokyo. The case, as reported by Japanese news outlets, also involves former Square Enix employees and a gaming title in the Dragon Quest gaming series.
According to The Verge, Naka and two other former Square Enix employees bought stock in the developer Aiming in early 2020, based on the inside information that the studios would develop a Dragon Quest mobile game titled Dragon Quest Tact. However, at the time, the partnership between the publisher and the developer wasn’t public, and Naka was working on an ill-fated Balan Wonderland game.
It’s unknown whether the other two employed also worked on the aforementioned game as the Sonic co-creator, but they’re being prosecuted with the same charges as Yuji Naka. Investigations unit of the Tokyo District Public Prosecutor Office, which made the arrest, stated that Yuji Naka previously bought 10,000 shares in Aiming for about $20 thousand (approx. 2.8 million yen) after he had learned about Dragon Quest Tact in January 2020 before the game’s development was made public.
The investigation unit currently prosecutes Sonic’s co-creator under the assumption that he intended to profit from an increase in the share price following the game’s announcement and its subsequent release. Dragon Quest Tact was released months after Naka’s stock acquisition, and it’s currently unclear whether he sold the shares for a profit.
If the Sonic creator did, Yuji Naka would have a 258% return on his initial investment, which would equate to some seven million yen. His arrest follows those of two other former Square Enix employees a day earlier on the same charges. Taisuke Sazaki and Fumiaki Suzuki, the two former employees, invested over $336,000 in Aiming stock between late 2019 and early 2020 after Suzuki about the aforementioned game’s existence in later November 2019.
However, Suzuki and Sazaki sold their share in Aiming after Dragon Quest Tact was announced in February 2020, and had an approx. 100% return on their investment — in other words, they profited tens of millions of yen. Japanese sources also state that Sazaki was one of the people actually working on Dragon Quest Tact and had received a special thanks mention in Yuji Naka’s Balan Wonderland credits roll. It would seem that Bobby Kotick wasn’t the only one with profit in mind.
Yuji Naka was the lead programmer on the original Sonic the Hedgehog from 1991 and its sequels, and his programming is credited to the game’s fluid and fast-moving graphics. He worked at Sega until 2006, after which he spent some time as an indie developer before he joined the ranks of Square Enix in 2018, where he reteamed with another Sonic co-creator, artist Naoto Ohshima, to develop Balan Wonderland.
Unfortunately, the new joint effort to make another game resulted in a failure; the game was released in March 2021 to poor review scores and controversies about seizure-inducing flashing sequences. In April 2022, Sonic’s Yuji Naka publicly apologized to Balan Wonderland‘s fandom over the unfinished state of the game, following his disclosure that he was actually removed from the project — for which he sued Square Enix.