Insider trading leads to the arrest of Sonic creator Yuji Naka
Japanese video game industry heavyweight and Sonic the Hedgehog co-creator Yuji Naka has been detained in Tokyo on charges of insider trading. This revelation, which was initially published by the Japanese news site FNN, has since been confirmed by the Asahi Shimbun newspaper in an English-language report.
Naka allegedly made a stock purchase in Aiming in early 2020 on the knowledge that the company was working on a mobile game based on the Dragon Quest franchise called Dragon Quest Tact. Naka was employed by Square Enix at the time, working on the doomed platformer Balan Wonderworld, but the publisher’s relationship with Aiming on the game was not yet public knowledge.
The arresting agency, the Tokyo District Public Prosecutors Office’s Special Investigations Division, stated that Naka had purchased 10,000 shares in Aiming for approximately $2.8 million yen ($20,000) after hearing about Dragon Quest Tact in late January 2020, before the announcement of the game the following month. It is assumed that he hoped to profit from a rise in the share price following the announcement and release of the game; however, it is unclear whether or not he really sold the shares based on the most recent information.
Two other former Square Enix employees were arrested Thursday, so Naka’s arrest on Friday comes as no surprise. After Suzuki discovered Dragon Quest Tact’s existence in November 2019, investigators claim that Taisuke Sazaki and Fumiaki Suzuki bought 47 million yen ($336,000) worth of Aiming shares between late 2019 and early 2020.
The Asahi Shimbun claims that Sazaki and Suzuki made tens of millions of yen by selling their Aiming shares after the introduction of Dragon Quest Tact in February 2020. According to the paper’s sources, Sazaki participated in the collaborative development of Dragon Quest Tact. The credits for Balan Wonderworld included a “Special Thanks” to Sazaki.
The firm released the following statement to VGC on Thursday on the arrests of Sazaki and Suzuki:
Today, some media outlets reported that the former employees of Square Enix were under investigation for suspected insider trading. We have been fully cooperating with requests from the Securities and Exchange Surveillance Commission. As the investigation by the Tokyo District Public Prosecutors Office is underway, we will continue to fully cooperate with the investigation. We deeply regret the great concern this has caused to all concerned. We have dealt with this incident strictly, including internal disciplinary actions taken against the suspected employees.
Naka and artist Naoto Ohshima created Sonic the Hedgehog, a mascot for Sega. As Sonic the Hedgehog’s principal programmer from 1991 onward, Naka was responsible for writing the code that made the game’s trademark fast-paced, fluid graphics possible. Naka left Sega in 2006, worked as an independent programmer for a while, and then joined Square Enix in 2018, where he and Ohshima worked together on Balan Wonderworld.
But things didn’t go swimmingly during production. The March 2021 release of Balan Wonderworld was received with mixed to negative critical reception and controversy over the inclusion of flashing sequences that some viewers reported caused seizures. Naka announced his dismissal from the project and subsequent lawsuit against Square Enix in April 2022, apologising to fans for the “unfinished” nature of the game’s development.
