Yuji Naka, co-creator of Sonic the Hedgehog and former head of developer Sonic Team, was arrested for insider trading in Tokyo. The news, first reported by Japanese news site FNNendorsed by the newspaper Asahi Shimbun in a report in English.
Naka is said to have purchased a stake in developer Aiming in early 2020, based on insider information that they will develop the Dragon Quest mobile game, Dragon Quest Strategy. At the time, publisher Square Enix’s partnership with Aiming in the game was not public, and Naka was working at Square Enix on the ill-fated foundation. Bali Wonderworld.
The special investigation unit of the Tokyo District Prosecutors’ Office, which carried out the arrest, said Naka bought 10,000 shares of Aiming for about 2.8 million yen ($20,000) after learning about it. Dragon Quest Strategy in late January 2020, before the game is announced the following month. The assumption is that he hopes to profit from the stock price increase once the game is announced and released—though based on current reporting, it’s unclear if he’ll sell shares.
Friday’s arrest of Naka followed two other former Square Enix employees a day earlier on the same charges. Investigators say Taisuke Sazaki and Fumiaki Suzuki purchased 47 million yen ($336,000) worth of Aiming stock between late 2019 and early 2020, after Suzuki learned about the company. Dragon Quest Strategyexistence of in November 2019.
According to the Asahi Shimbun, Sazaki and Suzuki sold their Aiming shares following the announcement of the Dragon Quest Strategy in February 2020, profits amounting to tens of millions of yen. Newspaper sources also say that Sazaki is actually a member of the joint development team working on Dragon Quest Strategy. Sazaki received a “Special Thank You” mention in credit for Bali Wonderworld.
Polygon has reached out to Square Enix for comment. In a statement was made to VGC Thursday, addressing the arrests of Sazaki and Suzuki, the company said:
Today, several media outlets reported that former Square Enix employees are being investigated on suspicion of insider trading. We have fully cooperated with requests from the Securities and Exchange Commission. As the investigation by the Tokyo District Prosecutors’ Office is underway, we will continue to fully cooperate with the investigation. We deeply regret the great concern this has caused to all involved. We took this case seriously, including taking internal disciplinary measures against suspected employees.
Naka co-created the Sega Sonic the Hedgehog mascot with artist Naoto Ohshima. Was the main programmer on the original 1991 Sonic Hedgehog and its sequels, it was Naka’s code that created the game’s signature smooth, fast motion. Naka left Sega in 2006 and spent some time as an indie developer before joining Square Enix in 2018, where he reunited with Ohshima to develop Bali Wonderworld.
But the development of the game did not go well. Bali Wonderworld was released in March 2021 and was met with poor reviews and controversy over flashing sequence causing seizures. In April 2022, Naka revealed that he was kicked off the project six months before its release, said he sued Square Enix for his departure and apologized to fans for the game’s “unfinished” status.
